LAGOS: Nigeria is heading towards an Argentinian-style default on its $33bn (£17bn) of overseas debt unless western creditors accept a deal to alleviate the country’s financial burden, a delegation from west Africa’s biggest economy said in London. As part of a four-country visit, the senior politicians warned that public unrest was growing over the hardline approach adopted by the west and that time was running out for negotiations.

Farouk Lawan, the chairman of the finance committee in Nigeria’s house of representatives, said: “It is unconscionable that Nigeria has paid £3.5bn in debt service over the past two years but our debt burden has risen by £3.9bn — without any new borrowing. We cannot continue. We must repudiate this debt.”

Mr Lawan, who moved a resolution last month calling on the government of President Olusegun Obasanjo to repudiate the debt, said parliament might trigger a crisis by refusing to sanction the funds to pay creditors.

“We are getting close to saying that we won’t pay.” Britain is Nigeria’s largest creditor, with 21% of its debt, and Gordon Brown has been backing an initiative to use Nigeria’s windfall from higher oil prices to pay the creditors a fraction of what they are owed.

Treasury sources in the UK said that no figures were at present on the table, although the starting point for negotiation has been a paper from a Washington thinktank suggesting that Nigeria should pay 30 cents for every dollar owed.

That would mean Nigeria paying around $9bn from its $17bn reserves.

The British government believes a strong Nigeria is vital for growth in the whole of West Africa, and has been seeking to broker a deal. Other creditors have questioned whether Nigeria has really overcome the corruption that has bedevilled the country for decades and have expressed concerns about the lack of an International Monetary Fund economic reform programme.—Dawn/The Guardian News Service