Nigeria has said it can no longer afford to service its $33bn foreign debts because of plunging oil revenues and the failure of some of its privatisation plans.

Consequently, the country has suspended payments on some of its debts as it tries to reschedule payments, said Central Bank governor Joseph Sanusi.

Last month Nigeria - one of the world's largest oil-producing nations - held foreign exchange reserves of only slightly more than $8bn, down about a fifth since December.

The external sector of the economy was under pressure during the period under review

Central Bank governor Joseph Sanusi

Mr Sanusi said he had decided to halt all debt repayments rather than to eat further into the reserves.

But information minister Jerry Gana was quick to try and downplay fears of a long-lasting default.

"It is not true that Nigeria has suspended servicing its foreign debts this year," he said.

Limited funds

Most of Nigeria's debt is owed to foreign governments, members of the Paris Club of official creditors.

Earlier this year, Nigeria parted company with the International Monetary Fund about how best to achieve a turn-around in its economic fortunes.

Nigeria's finance minister Adamu Ciroma told the BBC that the country was unable to pay because parliament had only approved a limited amount of funding for the current financial year.

The country's outstanding debt stands at around $30bn, but this is the first time it has completely halted its payments.

Nigeria has been asking official creditors for substantial debt relief, but apart from a modest amount of debt rescheduling, has not had much success, says the BBC's Dan Isaacs in the commercial capital Lagos.

Over spending

This is because it has failed to demonstrate the required track record of sound economic management, our correspondent says.

Put simply, Nigeria is spending faster than it is earning and therefore falling deeper into deficit.

But with national elections only a few months away, there's little sign that the government is tightening its purse strings.

The Central Bank governor Mr Sanusi said: "The external sector of the economy was under pressure during the period under review".

He added: "The deficit was financed through the draw down of external reserves." Officials said Nigeria's inability to recover money which a previous regime had stolen was making matters worse.

Impeachment crisis

The debt suspension was announced just as President Olusegun Obasanjo was faced with possible impeachment by both houses of Nigeria's parliament.

Mr Obasanjo stands accused of failing to curb the country's spending, of ignoring budgets, of allowing corruption to remain and of ignoring spending laws.

Nigeria's ruling party MPs have not yet decided whether to go ahead with a debate to impeach the president, even though a two-week deadline given by Nigeria's lower house of parliament for President Olusegun Obasanjo to resign expired on Monday.

At the weekend, President Obasanjo signalled that the political crisis was over and he went on national television to thank Nigerians for their maturity in helping the country surmount recent problems.