WATCH IT: Economists warn FG over indebtedness to China

Published:27 Jan, 2013

Minister of Finance, Dr. Ngozi Okonjo-IwealaMinister of Finance, Dr. Ngozi Okonjo-Iweala

Economists have advised the Federal Government to exercise caution in borrowing from the Peoples Republic of China.

The economists, who spoke to SUNDAY PUNCH in separate interviews, said Nigeria risked falling into a difficult debt trap if it did not curtail the country’s indebtedness to China, which stood at $678.91m (N106.9bn) as of September 2012.

Political economist, Prof. Pat Utomi, warned that if Nigeria was not strategic in its dealing with China, it would get into trouble.

He said, “Debt on its own is not bad, but how it is used will determine whether it will turn out good or bad. The question to ask is: Are we really strategic in borrowing from China? The last time we dabbled into borrowing from countries with large reserves, we got into a debt trap which we struggled to riggle our way out of.

“The Chinese are the main manufacturers in the world as a result of this, they have excess reserves and they are anxious to lend money to anybody that wants. But I think Nigeria needs to watch it carefully because if we are not strategic in the borrowing, we can get into more trouble with China than we were with the West. I don’t have anything against the Chinese. I’m only saying that if we are not careful, we may fall into a deeper debt trap.”

Another economist, Prof. Sherifdeen Tella, said rather than just borrowing from China, Nigeria should seek industrial partnership with the Asian giant.

Tella said, “It doesn’t matter so much that Nigeria is indebted to China, if that would lead to an industrial revolution in this country. It’s okay if we are importing machine from China to help our industries. But not just borrowing as usual.

“In dealing with China, we shouldn’t just do buying and selling. The Federal Government should work at creating a partnership between Chinese and Nigerian industrialists. The Chinese firms should be encouraged to set up plants in Nigeria.”

In the same vein, senior lecturer, Department of Economics, Dr. Usman Muttaka, advised the Federal Government to stop borrowing from China or any other country.

He said if well applied, Nigeria’s revenue from sales of crude oil and gas, could finance any project in the country.

“The managers of Nigeria’s economy have not been fair to us. They are trying to take us back to the debt trap we escaped from some years ago. We really have no business with taking any loan from any country,” he said.

Recently, the Debt Management Office stated that Nigeria was indebted to China by $678.91m (N106.9bn). The figure represented 99.95 per cent of the country’s total debts to bilateral and commercial creditors as at September 30, 2012.

According to the DMO, the total debt to bilateral and commercial creditors during the period under review stood at $679.22, of which $678.91m was from China.

There are indications that China’s credit facilities to Nigeria may rise due to fresh loan agreements signed by the two countries.

After September 30, 2012, the Federal Government signed fresh financing agreements with Chinese institutions, though details of the expected drawdown of most of the loans are not yet known.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had on September 11, 2012 in Beijing, signed three loan agreements with the China Exim Bank. The agreements are for $500m for the Abuja Light Rail Project; $500m for the construction of four airport terminals in the country and $100m for the Galaxy Backbone expansion of connectivity among government ministries, departments and agencies.

 

via Punch

Related Posts

Recent Posts

FG Set to Launch Buhari Mobile App

Nigeria's Minister of Information, Alhaji Lai Mohammed, has stated that the accomplishments of the Muhammadu Buhari regime are under-reported. As a result, the federal government will launch a mobile app that will give a real time update about the achievements of the government, he said. He spoke on Thursday at a meeting with Resident Information Officers (RIOs) in the ministry on the forthcoming launch of the information dissemination App. "..government is doing so much, yet people keep saying they do not...

Nigerian Military Set To Reopen Key Borno Roads After 3 Years Of Closure

Borno State Governor Kashim Shettima announced on Thursday that the Nigerian military will reopen the Maiduguri-Magumeri-Gubio and Damasak roads, which have been closed for three years due to the Boko Haram scourge.   The governor made the announcement while meeting with Muhammad Dandano, governor the Diffa region in the Niger Republic. Diffa, like Borno, has...

Rivers Rerun: INEC, Security Agencies Meet With Political Parties

The Independent National Electoral Commission (INEC) and the various security agencies, as well as political party leaders and their candidates have met again in continuous efforts to ensure that Saturday’s rerun polls in Rivers state are hitch-free.   With the poll already generating tension, the Deputy Inspector General Of Police in Charge of Operations, Joshak Habila, said no group would be allowed to cause violence during the exercise.   Meanwhile, the Resident Electoral Commissioner in the state, Aniedi Ikoiwak, has equally given the...

Is Buhari Out Of Sync With Nigerians? – By Adewale Giwa

Many people believe that the emergence of the opposition All Progressives Party (APC) will find a lasting solution to Nigeria’s woes. But, as it is, people who are not parochial in analyzing issues could easily conclude that the present administration of President Muhammadu Buhari is not showing any positive sign in tackling the nation’s challenges. This opinion of mine might not go down well with APC supporters/sympathizers who are out there to deceive and defend the government despite...

Troops Destroy Armed Bandit’s Camps In Zamfara

Troops attached to 1 Division of the Nigerian Army have ramped up clearance operations against armed bandits and cattle rustlers in Zamafara State as part of Operation Sharan Daji.   According to a press release issued by Colonel Sani Usman on Thursday, troops killed 9 armed bandits and livestock rustlers within the past three days. They also destroyed the bandits' and rustlers' camps and motorcycles in Bungudu and Maru Local Government Areas.   The soldiers also arrested two suspected armed bandits: Awidi Mohammed and...

Ghanaian Voters Pick Nana Akufo-Addo, As New President – Media Reports

Nana Addo Dankwa Akufo-Addo, Presidential candidate of the opposition New Patriotic Party (NPP), has won Ghana’s presidential election, defeating incumbent President John Mahama in a hotly contested election according to result released by media outlets across the country.   Mr. Akufo-Addo party also triumphed over Mr. Mahama’s National Democratic Congress (NDC), in parliamentary elections that also took place throughout Ghana on Wednesday, December 7, 2016.   President Mahama’s bid for reelection was hurt by widespread voter disaffection with an economy that has...

Obanikoro in Fresh N450m Poll Cash Scandal

The Economic and Financial Crimes Commission on Wednesday quizzed a former Minister of State for Defence, Senator Musiliu Obanikoro, for allegedly receiving N450m from the Coordinator of the Goodluck Jonathan Campaign Organisation in Lagos State, Adewale Onilere, during the countdown to the 2015 presidential election. Operatives disclosed that the N450m was part of the N23bn ($115m) allegedly disbursed to the leaders of the Peoples Democratic Party in the 36 states of the federation by a former Minister of Petroleum...

Governor El-Rufai Denies Paying Herdsmen

Kaduna State Governor Nasir El-Rufai has denied paying Fulani herdsmen to instigate the Southern Kaduna crisis. His media aide Samuel Aruwan, at a news conference yesterday, reiterated that El-Rufai did not pay the herdsmen, to either appease or arm them, as widely reported in the media. The Senator representing Kaduna South, Danjuma La’ah, accused El-Rufai of paying the Fulani herdsmen for killing his constituents. According to Aruwan, El-Rufai has continued with the peace efforts of former Governor Patrick Yakowa, and will...

First US Somali Lawmaker Gets ‘Islamophobic Threats’ In Taxi

The first Somali-American lawmaker in the US has said she was subjected to "hateful" anti-Muslim threats from a taxi driver in Washington DC. Minnesota Representative-elect Ilhan Omar said the cabbie threatened to remove her hijab during a confrontation on Tuesday. The 34-year-old said the incident occurred just after she attended policy training at the White House. Ms Omar, a Democrat, came to the US as a child from a refugee camp in Kenya. She made history and national headlines last month when...

Reps seek suspension of ban on land border-imported cars

The House of Representatives yesterday urged President Muhammadu Buhari to suspend the ban on the importation of new and used cars through Nigeria’s land borders.   According to the lawmakers, the policy is too harsh and will put more pressure on Nigerians who are already groaning under the prevailing recession.   The decision followed the adoption of a motion by Abdullahi Salame (APC, Sokoto) who said the percentage of Nigerians who could afford cars had declined drastically. He explained that the decline...

Lebanon Takes First Step To Abolish Marriage Rape Law

Lebanese lawmakers on Wednesday took the first step to overturn a law that allows rapists to avoid punishment if they marry their victims. The move came a day after protesters wearing fake-blood-stained wedding gowns confronted lawmakers just steps away from Parliament in the capital Beirut. After a scheduled review of Article 522 of the penal code, Lebanese Prime Minister Saad Hariri tweeted that a parliamentary committee had agreed to push forward with a plan that would abolish...

The Obamas Looks Incredible in Their Final White House Christmas Card

According to tradition, the White House sends out a holiday card to friends, political supporters, and members of the media. This year's greeting is bittersweet because it will be the last one from President Barack Obama after eight years in office. The silver lining here is that the Obamas — well, they're just like us — and they're sending out a card featuring a photo of the fam. There's...

Senate Calls for NYSC Overhaul

The Senate on Thursday called on the Federal Government to overhaul the National Youth Service Corps Scheme. The call followed a motion of urgent public importance moved by the Chief Whip of the Senate, Olusola Adeyeye (APC Central). The Senate also called on the government to improve on medical facilities in all NYSC orientation camps across the country and deploy experienced medical personnel to the NYSC medical centres. The Senate therefore mandated its Committee on Sports and Youth Development to conduct...

Italy President Starts Talks Over New Government

Italy’s president has started talks with the political leaders of the country to form a new government following the resignation of Prime Minister Matteo Renzi. President Sergio Mattarella began consultations on Thursday to decide whether to appoint an interim prime minister until upcoming elections scheduled for 2018 or to assign the leadership of the country to an interim government, which should serve until a snap vote could be held in spring. Mattarella, a former constitutional court judge, began by consulting the...

Stop begging those who stole Nigeria’s money, fight them – Femi Falana

Femi Falana, human rights lawyer, has called on the federal government to adopt an “aggressive policy” to recover looted funds instead of asking for loans. Falana said this on the sidelines of an event organised by the US embassy in Abuja to mark the international anti-corruption day. “People have stolen our money, why are you begging them to return it? We need to fight them and collect the money; we do not need loans that will mortgage the future of our country,”...

Rihanna Slams Beyoncé Feud Rumors Over Grammy Nominations

The “Work” singer wants everyone to “drop this topic.” She dismisses the suggestion of her having a beef with Jay Z’s wife, adding, “We don’t need to be putting black women against each other! We deserve to be celebrated, and the Grammy Academy agrees!” Rihanna accidentally fuelled longstanding rumors of a feud between the women on Instagram yesterday after Grammy nominations were announced....

Kano commissioner arraigned for land ‘racketeering’.

Faruk Faruk, Kano state commissioner of lands, was on Thursday arraigned before a high court over alleged land racketeering.   Also arraigned were Mahmud Bari, a former permanent secretary of the ministry, and Ahmad Ibrahim, a director.   The public complaint and anti-corruption commission of the state charged the trio for criminal breach of trust, which is punishable under section 97 of the penal code.   The accused were said to have sold a plot of land to one Baba Sharu Dala in April. They...

National ID is the solution to underage voting — Muhammadu Buhari

The federal government has tasked the National Identity Management Commission (NIMC) ?to ensure that the national identification number is used to authenticate eligible voters in future. Vice President Yemi Osinbajo gave the charge while speaking at a policy round-table meeting on Identity Management organised by NIMC in collaboration with the World Bank at the state house conference? centre. The accusation of underage voting, particularly in the north, was one of the few sour points of the 2015 election, but the use of...

Senators move to legalize insertion of constituency projects into budgets

The senate on Thursday resolved to pass a bill seeking to give legitimacy to the inclusion of constituency projects in the federal budget.   Constituency projects, which have been a subject of controversy owing allegations of corruption, are carried out by federal legislators across their constituencies.   Abdulmumin Jibrin, a suspended member of the house of representatives, had raised the alarm over alleged illegal insertions of constituency projects in the 2016 budget.   But the upper legislative chamber now wants to make such “insertions” legal.   The...

Suspected Herdsmen Behead Graduate In Abuja

A graduate farmer, Ndubuisi Uzoma, has been beheaded in his farm at Iddo community on Nnamdi Azikiwe Int'l Airport Road, Abuja, by assailants suspected to be Fulani herdsmen. The headless corpse of the university graduate was found in the pool of his blood last Sunday by his relations, who went in search of him when he failed to return from the farm. The deceased’s elder sister, Chidimma Umeh, told Northern City News that Uzoma had complained that he was having issues...

The Cable: Did Sanusi get his facts wrong on CBN?

Muhammad Sanusi II, the emir of Kano and former governor of the Central Bank of Nigeria (CBN), recently claimed that the CBN has been illegally funding the Muhammadu Buhari-led administration. In his claims, Sanusi said “the CBN-FGN relationship is no longer independent. In fact, one could argue their relationship has become unhealthy. “CBN claims on the FGN now tops N4.7 trillion — equal to almost 50% of the FGN’s total domestic debt. This is a clear violation of the...