Economics Project Abstract
ECONOMIC AND SOCIAL IMPLICATIONS OF DEBT RELIEF IN NIGERIA
Presenter:
Nithya Rajagopalan, Illinois Mathematics and Science Academy, 1500 West Sullivan Road, Aurora, IL, 60506; nithya@imsa.edu
Advisor:
Mr. Michael DeHaven, Illinois Mathematics and Science Academy, 1500 West Sullivan Road, History / Social Science, Aurora, IL, 60506; 630-907-5889/5960; dehaven@imsa.edu
Abstract:
Debt servicing encumbers developing nations. There are many advocates of debt relief and even complete cancellation, yet significant opposition exists. Financial institutions, along with western nations, have established organizations in order to alleviate the suffering of these countries. Nigeria has the second largest economy in Africa, but is currently in a major debt crisis as they are attempting to repay over $30 billion. Thus, over the years, the country has taken many loans that have been lost to corruption, unproductive investments, and consumption. Because the government focuses the majority of their national revenue towards debt servicing, other sectors, such as health care, suffer a great deal. For example, over 80% of the population contracts malaria at least twice in a single year, but this cannot be remedied until the country increases its health budget. While Nigeria is in desperate need of some sort of relief, complete debt cancellation many not be in the best interest of the country (to promote macroeconomic stability) or the creditor. Relief must come hand in hand with an effective plan to eliminate corruption, promote the economy, and reallocate money for governmental tasks.