Public Debt Management and its Implications for Economic Development: An Analysis of the Nigerian Debt Conversion Program (1988-2003)

Abstract

This paper examines the performance, impact and prospects of the Debt Conversion Program (DCP) as an option for public debt management in Nigeria and by extension, Sub-Saharan Africa. Factors such as macroeconomic instability, weak governance and institutions have been identified as affecting a successful DCP. The results show that between 1988 and 2003 when Nigeria implemented the program, political instability did not play a decisive factor in the number of debt converted. The paper stresses the need for sound external debt management policies through the creation of efficient institutions and decision making process for developing countries and concludes that the DCP alone is not a sufficient debt management strategy option for highly indebted poor countries.

Keywords: Debt, Debt Conversion Program, Economic Development, Nigeria, Sub-Saharan Africa, Paris Club, Investment

JEL Classification: C20, C82, E42, E62, F43, H62, H63