The Nigerian media space within the past few weeks have been filled with diverse reactions over the new romance between Nigeria and China, which has seen Nigeria incurred a great deal of debt over the years from borrowing from China. I sat with my radio has various social commentator made their analysis on why Nigerians should be worried about the money the Nigerian government is owing China as the terms and conditions been stated as part of the deal are nothing but one which calls for concern. The news moving from one social media platforms to another are that the failure of Nigeria to pay the debt will see to it that Nigeria concede its sovereign status to China. Enraged Nigerians, twitter warlord as we fondly call the online gladiators have taken to the public to vent their anger at the financial recklessness of the Nigerian government. However before we throw the blames or point accusing fingers at anyone, it is important that we know the true state and details of the loan deals which the Nigerian Government had with China.
The China Nigerian Loan deal
Data obtained from the Debt Management Office (DMO) showed that between 2010 and March 31, 2020, 11 loan facilities have been obtained from the China Exim Bank. The loans all have a seven-year grace period, 20 years tenor and were obtained at 2.5 per cent interest rate. They, however, have differing varying maturity dates. The projects for which the loans were obtained include Nigerian National Public Security Communication system Project; Nigerian Railway Modernization Project (Idu- Kaduna section); Abuja Light Rail Project; Nigerian ICT Infrastructure Backbone Project; and the Nigerian Four Airport Terminal Expansion Project (Abuja, Kano, Lagos & Port Harcourt).
Others are the Zungeru Hydroelectric Power Project; 40 Parboiled Rice Processing Plants Project (Federal Ministry of Agriculture & Rural Development); Nigerian Railway Modernization Project (Lagos – Ibadan section); Nigeria Rehabilitation and Upgrading of Abuja – Keffi Makurdi Road; Nigeria Supply of Rolling Stocks and Depot Equipment for Abuja Light Rail Project; and the Nigeria Greater Abuja Water Supply Project.
Details revealed that the National Public Security Communication system Project of $399m and the Nigerian Railway Modernization Project (Idu- Kaduna section) of $500m were both obtained in December 2010 and are due to mature in September 2030. Funds for both projects have equally been fully disbursed at 100 per cent and Nigeria has an outstanding of $322m and $403m to pay upon the Security and Railway projects, respectively.
Loans for the Abuja Light Rail Project of $500m and the Nigerian ICT Infrastructure Backbone Project of $100m were obtained in November 2012 and January 2013 respectively. Both projects have also been fully disbursed at 100 per cent with an outstanding payment of $480m and $100m, respectively.
For the $500m Airport Terminal Expansion Project (Abuja, Kano, Lagos & Port Harcourt), the $984m Zungeru Hydroelectric Power Project, and the $325m Nigerian Parboiled Rice Processing Plants Project (Fed. Min. of Agric & Rural Dev), the maturity dates are 2034, 2033 and 2036, respectively.
The Nigerian Railway Modernization Project (Lagos – Ibadan section) was funded with $1, 267m, the Rehabilitation and Upgrading of Abuja – Keffi Makurdi Road with $460m, the Supply of Rolling Stocks and Depot Equipment for Abuja Light Rail Project $157m, and the Nigeria Greater Abuja Water Supply Project with $381m. All four loan facilities were obtained in August 2017 and May 2018, with maturity dates of September 2037 and March 2038 As of March 2020, the Lagos Railway project has enjoyed 60 per cent disbursement rate while the Abuja-Keffi project has enjoyed a 17 per cent disbursement rate.
For the project on Supply of Rolling Stocks and Depot Equipment for Abuja Light Rail Project and the Nigeria Greater Abuja Water Supply Projects, no amount has been disbursed as of March 31, 2020, and no interest has been paid. The country is now trying to obtain another loan from China to rehabilitate the Port Harcourt – Port Harcourt – Maiduguri Eastern Railway.
According to the details provided here, the reasons for the loan deals were to facilitate the completion an execution of certain projects across the Federation, however while the noise is everywhere that the Federal government had made a grave mistake selling the sovereign right of the nation away to China, a move which China later said was not true.
According to the statement which was released by the Chinese government, its Foreign Ministry, in a statement, said: “We follow a ‘five-no’ approach in our relations with Africa:
“No interference in African countries’ pursuit of development paths that fit their national conditions; no interference in African countries’ internal affairs; no imposition of our will on African countries;
“No attachment of political strings to assistance to Africa; and no seeking of selfish political gains in investment and financing cooperation with Africa,” the ministry quoted President Xi Jinping, as saying at the FOCAC Beijing Summit in 2018. The Foreign Ministry said: “China is committed to enhancing investment and financial cooperation with African countries based on their needs to help them improve infrastructure and extradite socio-economic development.
By funding infrastructure and other areas that lag behind for short of money, we have helped the relevant countries break bottlenecks, enhance their capacity for independent development, realize social and economic sustainable development, and improve people’s livelihood. “Such cooperation has delivered tangible benefits to African countries and peoples. “In the process, China always gives full consideration to debt sustainability and seeks mutually-acceptable proposals through equal and friendly consultations. “That is the fundamental reason behind the enormous popularity of China-Africa cooperation in Africa.”
Considering the tenet of the Nigerian constitution, there is no objection to the borrowing of loans by the Federal government from other nations; however the agitation of the Nigerian people should be seen from another perspective. One of the features of a democratic state is inclusivism, it people must be actively involved in its decision making process. The people must be given a sense of belonging in all the doing of the government. The Nigerian government have a duty to keep its populace abreast of its decisions, probably if the nation was aware of these loan deals when they were initially drafted, the outcry that followed the revelation of the supposed terms and conditions would not have occurred.
Adding to this, the virtue of accountability is missing one from the books of the Nigerian political players, over the years a larger chunk of the wealth of the nation has been drained away by the handiwork of corrupt politicians, most funds marked for national development has been diverted for personal gains while the Nigerian masses suffers in silence. The money borrowed from China and the project which they are intended for, Nigerians are already skeptical if the Nigerian government will see to the completion of these various projects.
Conclusively, borrowing money to finance project was never a problem, there are far developed and economic stable countries that also borrow funds from other nations, and however how accountable are they with these funds? The Nigerian populace will continue to be very skeptical of the dealings of its government until the government imbibes in its dealing the true virtues of a truly democratic system.
By Marcus Amudipe