Paris Club

In 2005, the Paris Club—a group of creditor nations led by major economies like France, Germany, and Japan—agreed to cancel $18 billion of Nigeria's $30 billion external debt. This historic debt relief deal was negotiated under President Olusegun Obasanjo's administration, with Nigeria required to pay the remaining $12 billion upfront. The agreement was tied to Nigeria's implementation of economic reforms and anti-corruption measures overseen by institutions like the Economic and Financial Crimes Commission.

Nigeria's massive debt burden had accumulated since the 1970s oil boom, when the country borrowed heavily against future oil revenues to fund development projects. Military governments in the 1980s and 1990s continued borrowing while corruption diverted funds from productive use. By 2005, debt servicing consumed a significant portion of Nigeria's budget, limiting resources for education, healthcare, and infrastructure. The Obasanjo government's anti-corruption drive and economic reforms convinced international creditors that Nigeria could manage its finances more responsibly.