Property forfeiture not part of Nigeria-China loan agreement - FG - PUNCH

May 14 2019

BY  Okechukwu Nnodim, Abuja

The Federal Government on Monday declared that the loan agreement between Nigeria and China had nothing to do with the forfeiture of some Nigerian infrastructure to China-Exim Bank if Nigeria failed to pay back monies it received from China.

Minister of Transportation, Rotimi Amaechi, stated that it was important to allay the fears of many Nigerians who had reservations about the financial assistance being given to Nigeria by the China-Exim Bank.

 

There had been concerns in some quarters that China had taken over infrastructure in some African countries that could not repay their debt.

But while speaking on Monday in Nairobi, Kenya, at the 6th Annual East African Transport Infrastructure Conference, Amaechi said the agreements Nigeria entered into with the China-Exim Bank did not include property takeover in case of Nigeria’s inability to repay.

He was quoted in a statement from the Federal Ministry of Transportation as saying, “I don’t know the arrangement these countries made with Exim Bank, I do not think we will have any problems with repaying our loans.

“The countries that they are talking about are Kenya, Somalia and Sudan. These are countries that have not been able to repay their loans, I think. So what they (China) are doing is that they are taking over to manage and get their money. But it is not so in Nigeria.”

The minister added, “In fact, it is affecting our ability to borrow and they are now saying, look we can’t lend to you because these people are not ready to pay back. How do we know you are going to pay back?”

He said Nigeria was in talks with the China-Exim Bank, adding that by June “we should be able to say this is our repayment plan.”

“It also depends on what agreement plan you have with them; our agreement does not include the fact that they will come and take over our seaports or railways or airports.”

Amaechi said the Federal Government was confident of repaying the loans.

 

“So, that shouldn’t be any problem; our focus should be to run this infrastructure efficiently so we can pay back and there is no plan for them to manage any of it,” he stated.

The minister stated that many countries of the world now borrowed from China, adding that the government was entering into a partnership with another Chinese company.

He said, “They came to see me two days ago. The company is to raise 10 per cent of the equity. The Federal Government will raise 15 per cent of the equity. The remaining 75 per cent is to be borrowed, not by the Federal Government, but by the company because we formed a Special Purpose Vehicle which we will use in running the contract.”

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Steven Rich
Sep 17, 2018:
Well done
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