Apart from multi-lateral organizations, China has emerged as Nigeria’s largest creditor according to data obtained from the Debt Management Office (DMO).
The DMO figures show the current administration of President Muhammadu Buhari has so far borrowed $2.02bn from China since it assumed power in 2015.
As of June 30, 2015, Nigeria’s total indebtedness to China in terms of loans stood at $1.38bn but updated figures as of March 31, 2021, show the debt portfolio from China had risen to $3.40bn.
But the debt office says the loans are compliant with the provisions of Section 41 (1a) of the Fiscal Responsibility Act, 2007.
It explained further that the loans from China are concessional loans with interest rates of 2.50 per cent per annum, a tenor of 20 years, and a grace period (moratorium) of seven years.
The loans from China are tied to 11 infrastructural projects including the Nigerian Railway Modernisation Project (Idu-Kaduna section), the Abuja Light Rail Project, Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos and Port Harcourt), Nigerian Railway Modernisation Project (Lagos-Ibadan section) and the Rehabilitation and Upgrading of Abuja-Keffi-Makurdi Road Project.
It will be recalled that Nigeria’s Transportation Minister, Rotimi Amaechi, has said the country has already commenced repayment of loans gotten from China for the construction of railways.
In an interview on Arise News on Monday, Amaechi said Nigeria has moved from the N70 million revenue target for the Abuja to Kaduna rail line to N350 million as of May 2020.
According to the minister, once the operational costs are taken away, “we have started paying back the loans”.