Things are looking up for Nigeria's economy. Merrill Lynch, a New York based bank that specializes in investment banking and management, has decided to take on $500 million of Nigeria's debt. That amount is the remainder of the country's debt to the London Club, an informal group of private creditors, which loaned $2.4 billion to Nigeria. This is the second time that the country has been relieved of a large amount of debt, the first being the $18 billion that the Paris Club decided to cancel with support from the IMF. This transaction will free Nigeria from most of its debt and if the government realizes its goal Nigeria will be debt free when the president leaves office in May.
One likely result of the debt relief may be that Nigeria will expand and diversify its exports. The government now has the opportunity to implement its plans to look into new areas of exportation and support its smaller exports. This step would be greatly beneficial to the country's economy and would help to reduce its dependence on the exportation of oil. Another hopeful outcome would be considerable increases in the amount going towards social services. If government spending on social services is increased than we can also expect to see greatly decreased poverty rates as more money goes to welfare services. This is a great opportunity for Nigeria to change its spending policies, its exports and imports, and to strengthen its economy.
