By Lawrence Olaoye
Minister of Communication, Adebayo Shittu, has said that the Nigerian Communication Satellite (NigComSat) has concluded arrangements with the Chinese authorities for the procurement of two new satellites in order to capture both local and African markets.
Shittu who briefed State House Correspondents after a meeting with President Muhammadu Buhari yesterday said the China EXIM Bank had undertaken to pay the nation’s counterpart funding for the satellite when they realized that Nigeria was unable to raise its 15 percent ($82.5) equity fund.
According to him, the construction of the satellites would take two years and such would commence immediately necessary papers were signed by both parties.
Shittu said “NICOMSAT which is one of our agencies where we hope to procure two new satellites from China. Initially the agreement was that they will provide the cost of the two satellite $550 million minus 15 percent which is the counterpart funding. Because we could not afford this 15 percent, we have renegotiated with the China EXIM Bank and the China Great Walls who are the manufacturers and they have happily agreed to pay the entire $550 million to procure two new satellites.
“The two new ones will ensure that the Nigerian satellite company which is NICOMSAT can conquer the entire African continent in regard to the provision of satellite communication services. This is a very big business opportunity and I am sure that the Chinese appreciate the potential market which is so vast and that is why they have agreed that even without our ability to contribute 15 percent they are prepared to pay the entire sum of $550 million for the procurement of the two new satellites for Nigeria.”
Asked whether the $550 million was a loan, the minister said it was not but explained that “It will be equity participation of the Chinese company into our business. NICOMSAT is a limited liability company owned entirely by the federal government. So they are paying that to finance these highly required facilities and we will agree on the percentage sharing. Of course Nigeria has nothing to loss because we are not putting anything into it in terms of financial resources.”
On the President’s reaction to his presentation, he said “The president was excited and was not surprised because the Chinese are not just going to market our satellite to the entire African continent but also perhaps by legislation insists that all Nigerian entities must patronize the Nigerian satellite company rather going to Isreal, UK, US for satellite services. Now we can say by our local content policy we must patronize Nigeria.”