THE NIGERIAN DEBT CONVERSION PROGRAMME: AN APPRAISAL OF ITS IMPACT ON NIGERIA'S EXTERNAL DEBT MANAGEMENT
THE NIGERIAN DEBT CONVERSION PROGRAMME: AN APPRAISAL OF ITS IMPACT ON NIGERIA'S EXTERNAL DEBT MANAGEMENT
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Date
1996
Authors
BELLO, MUSTAPHA ABDULLAHI
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Abstract
The collapse of world oil price early in the 1980s coupled with
prouncement by some countries that they were broke and therefore unable
to service their debt signalled the beginning of what is commonly referred
to as the world debt crisis.
Hitherto, oil rich nations have engaged in a spending space and have
in the process acquired expensive tastes. Following the fall in their export
receipts occasioned by the decline in oil prices, and the continued reliance
on the importation of luxury goods plus the need to sustain economic
development; there was a need for external borrowing by developing
nations. The liberal measures taken by banks in the industrial nations in
granting loans to the developing nations also helped in accumulating debts
worth billions of dollars by these countries.
Nigeria, being a developing nation was also caught in this web of
international debt entrapment. In an attempt to turn-around the economy,
the Shagari administration adopted some restrictive import control policies
2
which later became popularly known as "Austerity Measures" in 1982.
Implementation of the policy became difficult due to the liberal attitude of
the administration.
Under the Buhari regime, emphasis was on the reduction of trade
deficit through import restriction. Much was not achieved here either,
partly due to severe pressure on the country's earnings brought about by
the debt burden and the decline in credit worthiness of Nigeria which
resulted in outright cancellations of credit lines to the country. The
Babangida administration introduced Structural Adjustment Programme
(SAP), the Second-tier Foreign Exchange Market (SFEM) and the Debt
Conversion Programme (DCP) introduced in 1984 is still continued by the
present administration.
This study, which hinges on the programme was conducted with the
aim of analysing the extent to which Nigeria's external debt obligation were
reduced as a result of the operations of the programme.
3
The research found out that debt conversion programme alone
cannot solve the nation's external debt problems, it can only complement
other debt management strategies, such as debt rescheduling debt buy back
and debt forgiveness.
Description
BEING A THESIS SUBMITTED TO THE
DEPARTMENT OF BUSINESS ADMINISTRATION,
AHMADU BELLO UNIVERSITY, ZARIA, IN PARTIAL
FULFILLMENT FOR THE REQUIREMENTS OF
MASTER DEGREE IN BUSINESS ADMINISTRATION
(MBA)
1996
Keywords
NIGERIAN, DEBT,, CONVERSION,, PROGRAMME,, APPRAISAL,, IMPACT,, NIGERIA'S,, EXTERNAL,, MANAGEMENT