AN EVALUATION OF DEBT MANAGEMENT STRATEGIES IN NIGERIA, WITH EMPHASIS ON DEBT CONVERSION PROGRAMME (1988 - 1997)
AN EVALUATION OF DEBT MANAGEMENT STRATEGIES IN NIGERIA, WITH EMPHASIS ON DEBT CONVERSION PROGRAMME (1988 - 1997)
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Date
2014-03-14
Authors
ILYASU, Gambo Muhammad
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Abstract
This project is intended to critically evaluate the Debt
Management Strategies in Nigeria right from inception in 1988 to 1997.
The study identifies two key factors which caused the country's debt
problems. There are internal factors — employment of isolationist and
import substitution policies, resulting in over valuation, excessive
reliance on single commodity — oil for foreign exchange earnings and
above all, the cost of maintaining the political entity, Nigeria. Externally,
factors such as increase in interest rates (dollar), currency adjustments
(third currencies), decline in oil prices as well as world economic
depression contributed significantly to the accumulation of foreign debt
by Nigeria.
In its efforts to manage the country's external debt, the
government embarked on a Structural Adjustment Programme and
employed amongst others, a debt buy back scheme, rescheduling and
refinancing negotiations which later turned out to be rather inadequate.
Therefore, other measures such as debt relief and debt equity swap
schemes were introduced. The study also brings out the inadequacies of
the traditional schemes (perceived to be costly and futile) which
necessitated the need for a revised or introduction of new techniques of
managing the country's external debt within a development perspective,
that is revitalization of Nigeria's economy through attraction of foreign
investment, at the same time reducing debt burden.
The Nigerian debt management strategies are analyzed critically,
noting in particular, the costs and benefits of the strategies on the part of
various participants, on the Nigerian economy. In addition, the
performance of the programme against its stated objectives was
measured. Moreover, the ability of the scheme to cope with its
perceived pitfalls is tested. Futile attempts have been made by the
government to control problems such as inflation, round-tripping and
foreignisation.
The Nigerian Debt Management Strategies such as restructuring,
refinancing, debt buy back, debt forgiveness and debt equity swap being
analyzed in this study are by no means a panacea to Nigeria's debt
problems. They may provide a temporary respite or contribute in
lightening debt service difficulties, but cannot offer a permanent solution
to the country's debt problem, neither will they be sufficient to restore
Nigeria's creditworthiness and attract foreign capital.
Description
A THESIS SUBMITTED TO THE POSTGRADUATE
SCHOOL, AHMADU BELLO UNIVERSITY ZARIA, IN
PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE AWARD OF THE DEGREE OF MASTER OF BUSINESS
ADMINISTRATION
(M.B.A.)
DEPARTMENT OF BUSINESS ADMINISTRATION
FACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA, NIGERIA
Keywords
EVALUATION,, DEBT MANAGEMENT STRATEGIES,, NIGERIA,, EMPHASIS ON DEBT CONVERSION PROGRAMME