House of Representatives yesterday mandated its Committees on Treaties, Protocols and Agreements, Finance as well as Debt Management, DMO, to liaise with the Ministry of Finance and the DMO Office to seek review or outright cancellation of latest Chinese loans to Nigeria on the principle of force majeur.
The House is also set to empanel a high powered investigation committee to look into all extant China/Nigeria loan agreements since 2000, with a view to ascertaining their viability, regularising and renegotiating them.
It said the National Assembly had been put in the dark on how most of the Chinese loans were collected and utilised by the federal government.
The resolutions came on the heels of the coronavirus pandemic which originated from Wuhan, China, last year and had affected the global community.
The parliament, which also underscored the urgent need to subject all subsisting Nigeria/ China contractual loan agreements to forensic fiscal scrutiny and review, noted the widespread global concern about the fraudulent, irregular and underhand characteristics of Chinese loan contracts with African states.
At the moment, there are at least 17 Chinese loans to fund different projects across the country.
The House stated that the loans had almost resulted in a new form of economic colonialism foisted by China on the Africa continent.
The motion to this effect, titled “Urgent Need to Review and Renegotiate Existing China/Nigeria Loan Agreements” was moved at yesterday’s plenary under matters of urgent public importance by Ben Rollands Igbakpa from Delta State and considered by the lawmakers.
Adopting the motion, the House resolved that henceforth, the need for loans should be in tandem with statutory obligations as prescribed by the Fiscal Responsibility Act.
Igbakpa said in his presentation of the motion: ‘’the House is aware that records from Nigeria’s Debt Management Office (DMO) revealed that the People’s Republic of China emerged Nigeria’s major creditor under the bilateral deals, with $2.3b, out of $3.3b and that the EXIM Bank of China is Nigeria’s biggest bilateral creditor in nearly two decades, having lent the African largest economy $6.5 billion (or N1.9 trillion) since 2002.
“The House is further aware that based on separate Freedom of Information replies by the Finance Ministry and the Debt Management Office, DMO, and published by Guardian Sunday Magazine of 03 November 2019, Nigeria has obtained 17 Chinese loans to fund projects across sectors since 2002 as follows:
“Transportation and ICT sectors have six projects each financed by loans from the Chinese bank, while energy, agriculture and water sectors, respectively, have three and two projects tied to Chinese loans.
“Notes further that according to the Daily Post of Sept 5, 2018, the first Chinese loan to Nigeria was agreed on March 27, 2002 as follows: $114.89 million each for constructing two 335 MW gas power plants, namely Omotosho and Papalanto (Olorunshogo) in Ondo and Ogun State, respectively.
‘’Both plants were completed in 2007. The loan was obtained at six per cent interest rate. The loan covered 65 per cent of the costs of the project, while Nigeria then covered the 35 per cent balance.’’
Igbakpa said that four months after, two other loans totalling $159.83 million for rural telephony were offered at a 3.5 per cent interest rate.
“Then from 2006 to September 2018, the country obtained 13 more loans, at between 2.50 per cent and 3 per cent interest rates.”