Buhari Regime Borrows $2.02bn From China In Six Years

According to statistics received from the Debt Management Office on Monday, the Buhari government has borrowed $2.02 billion in loans from China since 2015.

Nigeria’s overall debt to China was $1.38 billion as of June 30, 2015, according to data gathered from the DMO.

However, the country’s debt portfolio from China had increased to $3.40 billion as of March 31.

According to the DMO, Chinese loans are concessional loans with annual interest rates of 2.50 percent, a tenor of 20 years, and a seven-year grace period (moratorium).

The terms of the loans, according to the debt office, were consistent with Section 41 (1a) of the Fiscal Responsibility Act of 2007.

The Chinese loans are project-based. The Nigerian Railway Modernisation Project (Idu-Kaduna section), the Abuja Light Rail Project, the Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos, and Port Harcourt), the Nigerian Railway Modernisation Project (Lagos-Ibadan section), and the Rehabilitation and Upgrading of Abuja-Keffi-Makurdi Road Project are among the eleven projects (as of March 31, 2020).

According to the DMO, the low interest rates on the loans decreased the government’s interest costs, while the extended tenor allowed the loans to be repaid in full over several years.

However, as of March 31, China had received $719.61 million in debt service payments since the third quarter of 2015.

The interest on the loans accounted for 46.15 percent ($332.03 million) of the debt service paid.

The service of debt to China cost $102.19 million in the first quarter of 2021. This is around 11% of the entire $1.0 billion spent on external debt payment over the period.

Nigeria had more than $5.83 billion in foreign loans approved but not yet released as of December 31, 2020, according to the DMO.

The Export-Import Bank of China is expected to contribute $1.25 billion to this total. China has been the country’s major creditor, aside from multilateral institutions.

Nigerians had feared that if the country defaulted on its loans, it might lose some of its projects.

Fears escalated when Rotimi Amaechi, the Minister of Transportation, announced in August 2020 that the country had renounced its sovereign immunity in order to seek Chinese loans.

However, the minister said that as long as debts were paid, China would not need to claim any infrastructure.

He had remarked, “We must learn to pay our debts, and we are paying,” and that “once you are paying, nobody will come and steal any of your assets.”

Despite the assurances, there is still concern that the Chinese loans have some irritating terms that could jeopardize the country’s sovereignty, especially since the loan agreements are not publicly disclosed.

In an AriseTV interview on Monday, Amaechi denied knowledge of any condition that transfers over a national asset to China in the event of a default.

He said that Major General Muhammed Buhari’s administration had paid $150 million of the $500 million borrowed by President Goodluck Jonathan’s administration for the Abuja-Kaduna Rail project.

The minister also addressed other problems such as Bala-suspension Usman’s and the effects of Nigeria’s Deep Blue Project on all Nigerians.

When asked about the Federal Government’s plans to repay the loans, Amaechi said that borrowers should meet their obligations to avoid the Zambian experience, in which some national assets such as the Kenneth Kaunda International Airport, the Zambia National Broadcasting Corporation, and the National Power and Utility Company were reportedly used to settle Zambia’s financial obligations to China.

“When you take out loans, you are supposed to repay them,” he explained. We’re making amends today. The loan for Abuja-Kaduna was taken under the presidency of President Goodluck Jonathan. It was around $500 million. We’ve paid around $150 million on that debt as of today.

“Nigeria has never missed a payment or defaulted on a loan. I also don’t anticipate us defaulting on any other loans we’ve taken.”

When asked about the status of Ms Hadiza Bala-suspension Usman’s from the Nigerian Ports Authority, he stated, “I am not aware that I suspended Hadiza.” I am not the president, and I have no such authority. The president wields this authority.

“I was unaware that Hadiza had been suspended. I believe she was requested to step away so that the inquiry could focus on NPA rather than her. We’re looking into NPA.

“When the investigation is over, all of the results will be forwarded to the president, who will then make a choice on how to proceed.”

The minister also stated that he had no idea when the panel would complete its work and that it was in their hands.

“What we have done with the Deep Blue Project is that we will cut the cost of producing oil in Nigeria,” he added, referring to how the $195 million Deep Blue Project will affect all Nigerians who aren’t sailors.

“By the time we offer security on the seas, the economy will have improved because more money will be coming in. That is how it will be perceived.”

He further stated that if the economy did not improve six months after the project, the business in charge of the project would repay the money spent on it.