By Musa Adamu and Ikechukwu Okaforadi
Strong indication emerged Tuesday that Nigeria is presently at the mercy of People’s Republic of China in her quest to get $22.718billion for infrastructural development across the various sectors of the country’s ailing economy.
The Minister of Finance, Zainab Ahmed, who made submission to this effect during her appearance before the Senate Committee on Local and Foreign Loans, said $17billion out of the $22.718 billion being sourced from different international creditors is to be given by China Exim Bank alone, which represents 70% of the entire loan requests.
She stated that though other international creditors like the World Bank, African Development Bank etc, were approched for the loan but they were not as cooperative and willing, like the China Exim Bank.
“Most of our rail projects are being funded by China Exim Bank on 15 to 30 years repayment plans and 5 to 7 years moratorium which we are very comfortable with”, she said.
She explained that the loans if approved, will not be spent on consumption but strictly on what they were meant for like productivity in the economy, North East Rehabilitation, completion of the $4.9billion Mambila Power Project, extension of Nigeria Railway Network, etc.
She added that the loans, if approved, will not in any way sink Nigeria into unserviceable indebtedness, as the country is yet to exceed the 25% total debts to GDP which is even lower to 55% recommended by World Bank.
“If the projected loan is approved, our rate of debt servicing will only move from 18% of total debt to GDP to 20.94%”, she said.
The Minister also stressed that without the loans, the problem of infrastructural deficit stiflingly the growth of the nation’s economy and development generally, will remain unattended to as revenue generation cannot in anyway tackle the problem.
“The surest way out for the country as far as infrastructural deficit are concerned is the long term low cost loans being sought for from different international creditors since revenues cannot in anyway address the problem”, she said.
Aside the Minister of Finance, other Ministers like Babatunde Fashola of the Ministry of Works, Mohammed Bello of the Federal Capital Territory, Gbemisola Saraki of the Ministry of Transportation and Lai Mohamned of the Federal Ministry of Information and Culture, also appear before the committee for defence of segments of the projected loans under the purview of their various ministries.
Fashola in his submission before the committee on the bad state of Trunk A roads across the country, said paucity of funds which has been the problem over the years, remains the stumbling block.
According to him, while the Federal Government of Nigeria is owing the various contractors executing one project or the other on the roads, N300billion, only N179billion was appropriated for the Ministry of Works in the 2020 budget.
“A very good example of the pathetic situation is the Suleja – Minna Road where contractors handling it are to be paid N32bn but only N2.5 billion approved in the 2020 budget”, he lamented.
The Committee Chairman, Clifford Ordia (PDP Edo Central), however warned that the loan may not be approved by the committee if other affected agencies of government refuse to appear for defence of segments of their own.
The affected Ministries are Niger Delta, Education, Humanitarian and Disaster Management, Water Resources, Health, Power and Communication and Digital Economy.