Chinese loan increases by $ 330 million in one year to reach $ 3.59 billion on 15 projects
Nigeria’s debt to China rose from $ 3.26 billion as of September 30, 2020 to $ 3.59 billion as of September 30, 2021, an increase of $ 330 million in one year.
This emerges from an analysis of data on the external debt stock of the Debt Management Office.
Although the federal government has been mostly secretive about the terms of its Chinese loan deal, the DMO has made a few statements about them lately.
In a June 2020 statement, the DMO said, âTotal borrowings from China, amounting to $ 3.121 billion as of March 31, 2020, are concessional loans with interest rates of 2.5 billion. % per year, a period of 20 years and a grace period (moratorium) of seven years.
According to the DMO, the conditions comply with the provisions of section 41 (1a) of the 2007 Tax Responsibility Act.
In addition, the low interest rate lowers the cost of interest to the government while the long term allows loan principal to be repaid over many years.
In a new document titled âChinese Loan Status as of September 30, 2021,â the DMO revealed that 15 projects were funded by loans acquired from China. These projects range from water supply, power generation, railways, airport terminals, communication to agricultural transformation.
The first loan project was for the Nigerian communications satellite project in the amount of $ 200 million agreed on January 12, 2006. It was a five-year loan that expired on June 29, 2018. Nigeria has successfully repaid the loan, which carried an interest rate of three percent per annum, leading to the payment of $ 40.02 million as the interest rate.
The second loan was for the Nigerian National Public Security Communication System Project in the amount of $ 399.50 million agreed on December 20, 2010 and disbursed.
The third loan concerned the Nigerian railway modernization project (Wu-Kaduna section) in the amount of $ 500 million agreed on December 20, 2010 and disbursed.
While the fourth loan was for the Abuja tram project with $ 500 million agreed on November 7, 2012 and disbursed, the fifth loan was for the Nigerian ICT infrastructure backbone project with $ 100 million agreed on January 5, 2013 and disbursed.
The sixth loan was for the expansion project of four airport terminals (Abuja, Kano, Lagos and Port Harcourt) with $ 500 million agreed on July 10, 2013, but $ 455.28 million was disbursed, or 91.06 million. % of the agreed amount.
The seventh loan was for the Nigerian Zungeru hydropower project with $ 984.32 million agreed on September 28, 2013, but only $ 518.24 million was disbursed, or 52.65% of the agreed amount.
The eighth loan was for the Nigerian project for 40 parboiled rice processing plants (Federal Ministry of Agriculture and Rural Development), with an amount of $ 325.67 million agreed on April 26, 2016, but nothing was disbursed.
The ninth loan concerned the Nigerian railway modernization project (Lagos – Ibadan section), with $ 1.27 billion agreed on August 18, 2017, but only $ 759.84 million was disbursed, or 17.50% of the agreed amount.
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