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DEBT FOR THE FUTURE: Nigeria owes China $6.2 billion

With over $6.2bn credit facilities to Nigeria, the People’s Republic of China has emerged as the country’s highest creditor, investigations have shown.

Although the Debt Management Office listed on its website the nation’s total external debt as at September 30, 2012 as $6.29bn, investigations showed that the country’s indebtedness to China alone stood at over $6.2bn.

This means that most of the country’s debts to China have not been officially captured in the DMO database.

This is because most of the debts were sealed recently by the Federal Government, while the drawdown on some of the recent has yet to begin.

The DMO put Nigeria’s bilateral and commercial loans as of September 30, 2012, under which category the Chinese loans fall, at a paltry $679.22m, but the Chinese loans to the country exceed the amount by over 1,000 per cent.

Encouraged by a generous Chinese attitude towards lending to the country, many ministries, departments and agencies of the Federal Government had in recent times scrambled for Chinese loans in an uncoordinated manner.

This could double or even triple when ongoing negotiations for fresh facilities are finalised in the next one or two years.

Some of the earliest loans obtained by the Federal Government from China included $200m for the rural telephony project and another $200m for the Nigeria Communications Satellite project.

The most recent ones include $500m for the Abuja Light Rail project; $500m for four airport terminals; $100m for the Galaxy Backbone network expansion; $1.04bn for the Zungeru Hydropower project, $2.56bn for the Mambila Hydropower project; $1bn for the modernisation of the Lagos-Kano rail project; and $100m for expansion of connectivity in the MDAs.

via Punch

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