China gives stringent conditions for $20bn loan to Nigeria
• Demands Appointment Of Chinese Officials To Monitor Funds
• Government Sets Up Team To Study Demands
Apparently to secure firm repayment plan and to understudy viability or otherwise of key sectors for which Nigeria is seeking a $20b loan from the China EXIMbank, the Chinese government has listed certain demands to be met by the Federal Government.
Part of the conditions, The Guardian learnt, is for the Federal Government, through representatives from key ministries such as Finance, Budget and National Planning, Foreign Affairs, among others, to fine-tune terms and agreements, including possible repayment plan with the China Ministry of Commerce.
The Guardian learnt that correspondences between the two countries are also to fast-track the understudying of key areas Nigeria needs the concessionary loan for, and for the purpose of making advisory contributions on the way forward.
Other conditions include; appointment of key Chinese officials to closely supervise funds released to the Nigerian government on loan agreement.
It would be recalled that Minister of Budget and National Planning, Udoma Udo Udoma, recently led an inter ministerial delegation, comprising top officials of Commerce, Foreign Affairs, Finance ministries, among others to China to solicit a $20b concessionary loan.
It was further gathered that although, the Chinese government expressed willingness to support the Federal Government with a loan to finance capital budget deficits in the country, it however expressed concerns over how the loans will be managed to achieve maximum value, saying that its technocrats will of necessity first understudy Nigeria’s request and offer necessary advisory and financial assistance once the team finalize with the Nigerian government for onward transmission to China Exim bank for action.
Udoma, had in Beijing requested the Chinese government to assist Nigeria financially in funding critical infrastructure in the country. He presented a request for $20billion concessionary loan.
The minister was in China for the coordinator’s meeting on the implementation of the follow-up actions on the Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC).
At the Johannesburg Summit in South Africa, in December 2015, China had agreed to Assist African countries in ten strategic areas that will help their economy. It pledged $60b in aid, grants and concessional loans.
Udoma, while describing the mission of his delegation to China, said Nigeria is trying to get as much of the Chinese funding for projects in the form of grants, aids, investments and loans, promising that the Federal Government has constituted a team of experts to liaise with the Chinese government in order to make the loan come through.
The Chinese government is however mindful of logistics on ground to pull such a heavy loan through, repayment challenges but the minister gave assurance that Nigeria will not exceed limits of loans she can repay.
“The loan component will however be within the country’s debt sustainability limits. Projects proposed for the facility by Nigeria is in the region of about $20b,” the minister said.
Udoma said Nigeria would be in a better stead if the Chinese government agrees to assist with a substantial part of the funds required, even as he stressed the need for special consideration for Nigeria, given strategic relationship between the two countries, based on population and economic potentials.
During the Cooperation meeting attended by ministers from various countries in Africa, China’s President Xi Jinping said the meeting was an important step taken by China and Africa to implement the consensus of Chinese and Africa leaders and the outcomes of the FOCAC.
“It is a significant measure to boost China-African cooperative development. The meeting demonstrates to the world once again that no matter how the international landscape may change, the resolve of China and Africa to pursue unity and win-win cooperation will never change,” Jinping said.
The Guardian learnt that initial discussions have been successful, and a team from Nigeria and China Ministry of Commerce have already commenced sharing information to work out timelines before such is forwarded to China Exim bank, which is to provide the funds under the authority of the Chinese government.
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34 Comments
China should take extra precautionary measures on giving loans and grants to Nigeria because Nigeria is not good in repaying debts,the debt cancelation by Paris clubs and others even when the economy and oil price are upward and we could not pay our debts to them is one example of Nigeria having a bad history of not paying debts.another is the havy debt burden of over 30 billion USD local and foreign debts currently hanging on the economy which we are finding difficult to service and pay.The uncertainty of the country and the economy are other issues with rising agitations of separatist groups from Biafra and Niger delta.and this loan from China is a long term loan not a short term.
He who goes borrowing must go sorrowing. Which way Nigeria?!
THANK YOU BASIL. Na so dem dey tell person. But they will never listen to you
The chinese government’s demand should go beyond demanding the appointment of chinese officials to monitor the funds. They should also require those responsible to be tried under chinese law if zoogeria defaults or it is found that the funds are in any way misappropriated. In a nut shell chinko, chinko law, chinko punishment simple.
R u mmad? Or simply simply krazyy
To answer your “questions”, No I’m not mad. I’m actually being serious.
I see my recommendation bothered you so much … hmmm I guess you must be one of the beneficiaries of the status quo.
It is a matter of national pride.
Then we should be proud enough not to go borrowing, especially on their terms.
“Chinko” is a racist term to refer to Chinese people. I assume from your storyline that you are someone who has gone places (is exposed). Racism is going out of fashion o!
Hahaha noted. Didn’t mean it in a derogatory way. More like a slang term.
First, it is the height of irresponsibility for one country to approach another country for a soft loan of $20 billion, that is : N8 trillion in one budget year. It’s like an insolvent man in Abule Oja going to a rich neighbour to borrow a billion Naira. Second, any country that agrees to give such a loan would have had to reassured itself a priori, of reaping thrice or more, that amount in benefits to itself over the loan period and even beyond. This is indisputable because, contrary to what many in this administration have chosen to believe, there is no free lunch anywhere, not even in Freetown. And for the information of those who choose to remain naive, China is not a free giver, it is a hard bargainer, ultimately a taker like all other so-called donor countries out there. Thirdly, with oil being slowly but steadily overtaken by exponential technologies in the energy industry, how does Nigeria hope to ever pay back such a huge loan, or are we bargaining to mortgage the fates and futures of our children to the Chinese? Finally, what has happened to the panoply of Billions and trillions of Naira that this administration claims to have saved from TSA, Returned loots, FIRS, Ghost workers etc.? Let’s hope they are not lying about those savings, or worse still, spending the money without disclosure, transparency, accountability and/or appropriation.
You obviously know nothing about international finance. The US borrows $1 billion per DAY! and has a debt to GDP of 110% to Nigerias <40%.
Comparisons between US borrowability and Nigeria’s (borrowability) is recklessly insane. Is like comparing peugeot 404 and 2016 range rover hse
My oga, God will bless you. Idiots and useless people we have in Nigeria. How dare anyone compare US economy to that of Nigeria? We should begin to check some Nigerians for signs of insanity. I lived in Manchester and for 10 years, only once did power go off for 5 minutes. How will small and micro enterprises thrive in this decadent Nigeria: no power, multiple taxations and lack of facilities to drive small businesses. From where will the government get taxes to repay these huge loans when our businesses are dying and unemployment is growing?
You? Manchester? I’m certain you’re in a dream. You know well about Nigeria even after 10 years of staying in Manchester.
Ewu, mind your business and don’t pokenose into other people’s affairs. Jealousy will ruin you. Are you not ashamed of Nigeria borrowing money when we cannot account for all the petrol dollars Nigeria has earned for the past twenty years?
” We should begin to check some Nigerians for signs of insanity.” I totally agree with you!
How? Robert Malthus? Money has been the same for over 2000 years. what is your point?
He is a trader at Alaba and he attended night school. Don’t blame him.
You must be a Nigerian comedian referring to US – the biggest economy in the world – borrowing to justify Nigeria’s cap-in-hand trip to China
Nnaa kedu ife gi na echu onwe gi aha n’iru ndi ofemmanu?
I am NOT a comedian fool! I lived in the US for over a decade, and know more about international and state finance than you will ever know in 2 lifetimes. Please hide your ignorance and stop embarassing umu Igbo with your imbecility. The US owes China over 4 trillion US Dollars and counting. The US cannot cripple the Chinese economy by anything they do; but if the Chinese decide to call in their US loans (This will cripple China too!) the US economy will be in tatters.
Why do you think The Global Financial Crises did not affect China?
It is called INTERNATIONAL/MACRO ECONOMICS for a reason. Please sir hide your moronic views, it is not going to help you get a US Visa. There is nothing in the US for most middle and upper class Nigerians!
The problem with ghetto analysts is the rush to equate apples with oranges. Yes, America borrows a billion per day, and America generates billions per hour; and when America pleases, America wipes out its debt with a single globe-wide manoeuvre . Mr EwuCanbeer, {your name defines your thoughts} I know America well, Nigeria is no America.
I also know America well fool, went to uni there!! The US CANNOT repay its debts ever! forever!! You will never be able to repay your credit card debt ever. You are probably one of the idiots that borrow and save for 5 years to come to Nigeria to impress your people (people that have drivers and live in 5 bedroom houses!), then go back and pay the loans for the next five years. was in the US between 1996 and 2014. I know more about finances and US culture than you ghetto fool. You probably have a degree yet drive taxis and work at macdonalds. with children on the same social status as my driver calling your kids “African booty scratcher” trailer park police officers telling you “get on the ground!!” here police officers call me sir and open doors for me. Nigerians are waking up to the real life of Nigerians there.
Mr Ewu, I understand that means goat, the name fits those who boast of their good life based on their limited exposure to what real living means. Never mind my dear, I feel for you and your police orderlies who open doors for you. Think of it, what type of political economy are you running if what able bodied men in police uniforms are detailed to do is open doors for you while crime festers and the country drowns in malfeasance. Sorry for you dear friend, I’d rather my Mcdonald job slapping burgers than idle life of unearned privilege. Police men opening doors for you, pray tell me, don’t you have hands?
The US does not, and will not have to repay its debt.
And Yes. I roger u da mystique one on this!!
Apples are (a) fruit. So are/is orange(s). Lol
Ps
I no fit tok too much abeg
The Chinese should also demand appointment of their Nationals as Nigeria’s Minister of Works, Housing, Power, Trade & Investment, Petroleum, and also Chief Of Staff to The Borrower President!
Seriously, how is this loan necessary? Is it justified? Why is it that we as a country can not look inwards? Why cant we explore other options available to us? It is the same Chinese people who have other investments already in this country that we are going cap in hand begging for loan. If we lack options or have simply run out of ideas on the way forward, we should start by reducing the number of states to 19 rather these very unproductive 36 states. The major factor depleting our resources is the cost of running the affairs of the nation. This, if anything is the starting point and then every other thing will follow.
Then you should not complain of infrastructural deficit. Years of neglets requires urgent solution for us to get out of this problem. So stop being a persimist.
How much taxes did you pay last year?
President Goodluck Jonathan’s administration made over $300 Billion from the highest oil boom in history of OPEC and we cannot point to anything tangible that was done with the money,I remember him saying “if someone buys private jet,they say he is corrupt” where are his private jet buyers today,are they still flying high?
Nothing tangible ? Do you know how many riff-raffs became millionaires over-night? How many world leaders can beat that?
Wise people don’t go borrowing ! Borrowing for what ? The money collected from looters ! Where are they ? Make peace with the regions that lay the golden eggs and there will be more development . China should be wise because Nigeria is not stable at the moment . Cost of running Nigeria beaurocratic govt institutions is much . Salaries etc just much . A man who do not what peace , how can he move a head . ND people you want start sending in Airforce . Don’t be surprise the way , you will overthrowned and all your commanders will be killed , when don’t handle the crises in the eastern region wisely ! Because now pple will join forces to remove you from power . Because your hardship style on the people of this country is too much . When pple get sick now in Nigeria , they just die . No money for treatment . Is that a govt ??? The way pple will remove from power , it will surprise . Old fool Buhari
Hmmmmm! Bitterness.
So China is demanding that Nigeria handover the government to Chinese in order for Nigeria to benefit from a loan.
It is a loan that Nigeria has to pay back whether it is successfully used or not. The Chinese are planning the easiest espionage on Nigeria.
Any sensible person in government or the country should be outraged by this affront by these Chinese rogues.
We will review and take appropriate action.