SERAP asks govs, Wike to disclose details of Chinese loans

Socio-Economic Rights and Accountability Project (SERAP) has asked state governors and the Minister of Federal Capital Territory, Nyesom Wike, to disclose details of Chinese loans, liabilities, and other external borrowing obtained, and guaranteed by the Federal Government as well the terms and conditions for any such borrowing, including the provisions on collateral.

SERAP urged them to provide details of the repayment obligations, liabilities and other external borrowing obtained and guaranteed by the Federal Government, the interest rates on the loans, and any defaults, debt restructuring, and debt exposure to China and other creditors.

The body also urged them to clarify any investment agreements with Chinese companies and repayment histories of any loans, liabilities and facilities obtained from China and other external creditors guaranteed by the Federal Government.

In a letter at the weekend, signed by SERAP’s Deputy Director, Kolawole Oluwadare, the organisation said they were concerned that states and the FCT might have failed to efficiently manage their debt obligations, especially their external debt and investment obligations, as guaranteed by the Federal Government.

According to SERAP, the failure to uphold their obligations is contrary to Section Six of the Debt Management Office Establishment (etc) Act, and creates financial risks and other exposure to Nigeria with respect to these Chinese loans, liabilities and other external borrowing.

SERAP said the Chinese loans, liabilities and other external borrowing by states and the FCT might not have been used for the purposes for which they were obtained and terms and conditions guaranteed by the Federal Government.

The organisation lamented that there were significant risks of confiscation of Nigerian assets in foreign jurisdictions by multilateral and bilateral agencies and other creditors in cases of failure by states and the FCT to satisfactorily observe and fulfill the terms and conditions of the Chinese loans, liabilities and other external borrowing, which are guaranteed by the Federal Government.

“The apparent inadequacy of safeguards and accountability mechanisms for these Chinese loans, liabilities and other external borrowing may also expose Nigeria’s assets in foreign jurisdictions to confiscation.

“Your state and the FCT have a shared obligation to ensure that the spending and repayment plans of Chinese loans, liabilities, facilities and other external borrowing are consistent with the provisions of national and international standards, and to prevent or mitigate risks of confiscation of Nigerian assets abroad,” SERAP said.