By Sulaimon Olanrewaju

DESPITE paying the sum of $461.89million (about 13.4 per cent ) of the $3.313billion debt (Chinese loans) owed the Peoples Republic of China, the outstanding (Chinese loans) against Nigeria is still $3.12billion (about 94 per cent), a document from the Debt Management Office has revealed.

The document accessed on DMO’s website gives the breakdown of the payment as $192.21million (Chinese loans) being part of the principal, while $269.68million has been paid as interest.

The issue of the nation’s indebtedness to the Asian country has been a cause of concern to many Nigerians as a House of Representatives’ investigation revealed the existence of a Sovereignty Guaranty clause in some of the agreements. The clause empowers China to take over the assets constructed with the loans in case of default by Nigeria.

According to the DMO document, the Chinese loans which are tied to a number of projects such as rail, road, communication, power and agriculture, each has a tenor of 20 years, attracts 2.5 per cent interest and a moratorium of seven years.

According to DMO, as of March 2020, the agreement for the oldest of the Chinese loans was signed on December 20, 2010, while the newest was signed on May 29, 2018. Repayment for the current loans will continue until 2038.

For the Nigerian National Public Security Communication System project, Nigeria signed a loan deal of $399.5million with China on December 20, 2010. Nigeria has received 100 per cent of the loan sum and has paid $76.83million as principal and $84.92million as interest, totalling $161.75million. The outstanding against the country currently is $322.67million.

Nigeria and China signed a loan deal of $500million for the Nigerian Railway Modernisation Project (Idu- Kaduna section) on December 20, 2010. 100 per cent of the loan sum has been disbursed to Nigeria it has paid back 96.15million as principal and $74.52million as interest. Total payment by Nigeria is $170.67million, while the outstanding is $403.85million.

On November 7, 2012, Nigeria entered into a loan deal with China for the sum of $500million to finance the Abuja Light Rail project. Over the years, Nigeria has paid $19.23million out of the principal and $60.63million as interest, totalling $79.86million with outstanding at $480.77million.

To finance the Nigerian ICT Infrastructure Backbone Project, Nigeria signed a $100million loan deal with China on January 5, 2013.

Although the country has not paid any part of the principal, it has paid $9.38million as interest. So, the outstanding is $100million.

A $500million loan agreement was entered into by Nigeria and China for the Nigerian Four Airport Terminal Expansion Project (Abuja, Kano, Lagos and Port Harcourt) on July 10, 2013. The sum of $455.28million representing 91.06 per cent of the total sum has been disbursed by China.

Nigeria has not paid back any part of the principal but has paid $40.58million as interest. The outstanding against the country is $455.28million. For the Nigerian Zungeru Hydroelectric Power Project, Nigeria signed a loan deal of $984.32million with China on September 28, 2013. China has released only $518.24million, representing 52.65 per cent of the total sum.

Although Nigeria has not paid any part of the principal, it has paid $19.28million as interest, while the outstanding is $518.24million.

Nigeria and China signed a loan deal of $325.67million on April 26, 2016, to enable Nigeria to fund its 40 Parboiled Rice Processing Plants Project. No part of the money has been released. So, Nigeria has not paid any money on the loan and there is no outstanding against it.

An agreement for a loan deal of $1.267billion was signed between Nigeria and China on August 18, 2017, to enable Nigeria to finance its Railway Modernization Project (Lagos-Ibadan section). $759.84million, representing 59.96 per cent of the total, has been released. Nigeria has not paid any part of the principal but has paid $19.11million as interest. For the Rehabilitation and Upgrading of Abuja-Keffi- Makurdi Road project, Nigeria signed a loan deal with China for $460.82million on August 18, 2017. A sum of $80.64million, representing 17.5 per cent, has been disbursed by China.

Although Nigeria has not paid any part of the principal, it has paid $1.84million as interest. The loan deals for the Supply of Rolling Stocks and Depot Equipment for Abuja Light Rail as well the Greater Abuja Water Supply, $157million and $381.09million respectively, have been signed, but China has not disbursed any part of the loan.

Many Nigerians have expressed concern that with the inclusion of the Sovereignty Guaranty clause in the agreements, Nigeria might lose some of these projects to China in the event of failing to meet the repayment terms but Mr Rotimi Amaechi, Transport Minister, has assured Nigerians that there would not be any need for the Chinese authorities to seize the nation’s assets as the country would pay back its debts to China.

While speaking on a television programme at the weekend, Amaechi said, “It’s not that Nigeria doesn’t have the capacity to pay back. We’ll payback. At 2.8 per cent, what other countries would give you that loan? 2.8 per cent for 20 years with seven years moratorium, why can’t your payback? The repayment plan is not done by us, it’s done by the Ministry of finance, but they are meeting the requirements.”

Editors Note; Written By Sulaimon Olanrewaju and originally published in Nigerian tribune

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