Minister of Information Mr Labaran Maku yesterday dispelled fears that Nigeria's foreign debt profile of five billion U.S. dollars could harm the economy. "We currently owe five billion dollars as foreign debt", the minister said, while speaking with Nigerian journalists in London.

"If you compare that to our foreign reserves and our economic capacity, there is no problem as far as the country's external debt is concerned," he said.

Maku, who noted that most developed and developing nations were not free from debt, however, conceded that debts should not be allowed to overwhelm the country's capacity to pay back, saying in the last 13 years of Nigeria's democracy, the country had been able to exit the debt track.

Maku recalled that at a point in time, the country owed the Paris Club of creditors about 35 billion U.S. dollars, adding that the country was, nonetheless, able to pay off a substantial part of its external debt.

"What led to the huge debt was that the money borrowed was used for things that were not productive", he said.

The minister said the "new" debts owed by the government were used to revamp the country's infrastructure such as the railways and the power plants.

"These debts are private-sector loans, guaranteed by government, because the loans are given out at lower interest rates", he said.

Maku said that for instance, the Chinese Nexim Bank was currently negotiating a loan to build modern rail tracks in Nigeria.

"They (Chinese) are already building one railway track between Kaduna and Abuja. Also, work has commenced on the railway line linking Lagos through Ibadan to Ilorin and Minna, while linking up with the one from Abuja to Kano," he said.

The minister expressed optimism that the "private sector" debts would propel the growth of the economy. NAN