Chinese loans rise by 209% under Buhari, hit $4bn
During the leadership of Major General Muhammadu Buhari (ret. ), the Federal Government’s borrowing from China has increased by 209.15%.
This is because the total amount of bilateral loans increased by 219.91% from $1.58 billion in June 2015 to $5.07 billion in December 2022. Over the reviewed period, total borrowing from China increased from $1.39 billion to $4.29 billion.
Chinese loans account for 84.73 percent of the entire debt Nigeria owes to other nations, according to data available from the Debt Management Office. France, Japan, India, and Germany together account for the remaining 15.27 percent.
In a report titled “Status of Chinese loans as at September 30, 2021,” the DMO reported 15 projects that were being funded using Chinese loans as of that date.
The Federal Ministry of Agriculture and Rural Development of Nigeria has listed additional loans for projects like the Nigerian Greater Abuja Water Supply Project, the Rehabilitation and Upgrading of the Abuja-Keffi-Markurdi Road, the Nigerian Railway Modernization Project, and the Nigerian 40 Parboiled Rice Processing Plants Project.
While Nigeria has regularly benefited from Chinese assistance under Buhari, China-Exim Bank recently rejected an earlier arrangement to lend Nigeria $22.79 billion.
The loan had been approved on March 5, 2020, and June 2, 2020, respectively, by the Senate and the House of Representatives under the 2016-2018 Federal Government External Borrowing (Rolling) Plan. This could have an effect on the Nigerian Railway Modernization Project (Kaduna-Kano segment), where the Federal Ministry of Transportation and the contractor (CCECC Nigeria Limited) are requesting a $973.48 million loan from China Development Bank
China loaned Nigeria $658.72 million in 2022 despite the current hitch in loan approval.
Rotimi Amaechi, the previous minister of transportation, claimed in 2021 that a National Assembly investigation into the Federal Government’s ability to repay its debt had made China less willing to lend Nigeria money.
Amaechi claimed that the investigation prohibited China from providing Nigeria with additional loans while responding to questions on Politics Today on Channels Television.
He added that the combined effort of the Senate President and Speaker had stopped the probe, which had helped.
Recently, the President of the World Bank, David Malpass, told The BBC that he was concerned about some of China’s loans to developing economies in Africa.
He noted that the terms and conditions of these loans need to be more transparent. This is as countries including Ghana and Zambia appear to be struggling to repay their debts to Beijing.
He said, “What I strongly encourage is that they be transparent in their contracts. That’s been one of the problems; if you write a contract and say ‘but don’t show it to anybody else’, that’s a minus. So, get away from that.”
He warned, “For governments in Africa, they shouldn’t be offering collateral as an inducement to make a loan, because it locks it up for generations. That’s been happening with China.”
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