FG’s Chinese loans skyrocket by 209%, hit $4bn
By Adekemi Familusi
The Debt Management Office (DMO) has revealed that the federal government’s borrowing from China has grown by 209.15 percent under President Muhammadu Buhari’s administration.
The DMO report showed that the loans from China are concessional loans with interest rates of 2.50 percent per annum, 20 years, and a grace period of seven years. It stated that, as at September 30, 2021, the DMO listed 15 projects that were being funded by Chinese loans in a document titled “Status of Chinese loans as of September 30, 2021”.
According to the DMO, the more listed loans include the Nigerian 40 parboiled rice processing plants project, the Railway Modernisation project, Nigeria Rehabilitation and upgrading of Abuja-keffi-Markurdi Road project, Nigeria supply of rolling stocks and Depot equipment and Nigeria Greater water supply project.
Rotimi Amaechi, the immediate past minister of transportation, on his part, alleged that China was becoming skeptical of borrowing Nigeria money because of a National Assembly probe of the Federal government’s ability to pay back its loan. He added that the combined effort of the senate president and speaker had stopped the probe.
The loan had been approved under the 2016-2018 Federal Government External Borrowing (Rolling) plan by the senate and the House of Representatives on March 5, 2020, and June 2, 2020, respectively. This may impact the Nigerian Railway Modernisation project with the contractor (CCECC Nigeria Limited) and the Federal Ministry of Transportation, engaging China Development Bank for a loan of $973.48m.
Meanwhile, the president of the World Bank, David Malpass explained that he was concerned about some of China’s loans to developing economies in Africa, and he warned the governments in Africa that they should not be offering collateral as an inducement to make a loan.
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