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Published On: Mon, Aug 3rd, 2020

Nigeria can pay back Chinese loans in 20 years -Minister

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Minister of Transportation, Rotimi Amaechi says Nigerian government has the capability to pay back loans collected for the construction of rail projects within the stipulated period of 20 years.
Amaechi, in a statement on Saturday, said China was the only country giving out loans with a low interest rate of 2.8 per cent.
He said no country in the world would give out a loan without a guarantee to pay back such loans.
“The trade agreement between Nigeria and China, the ministry of transportation does not take loan, everything about loan is directed to the Ministry of Finance, so, I couldn’t have signed any loan because I don’t take loan.
“What I signed is what is called commercial contract, which is contract between the Federal Government and CCECC as a contractor, the contract between Nigeria and China is usually signed by the ministry of finance.
“Whether its the ministry of finance that signed it or the ministry of transportation, the issue is that nobody will give you loan free of charge.
“There must be an agreement and such agreement must contain some terms, that doesn’t mean that you are signing away the sovereignty of the country, no country will sign out its sovereignty.
“What clause 8 says is, I expect you to pay according to those terms we have agreed, if you don’t pay, don’t throw your immunity on me when I come to collect back the guarantee that was put forward, that is all.
“We are paying the loans. In the same National Assembly sitting, they were told that of the 500million dollars loan, we have paid 96 million dollars already, Nigeria is already paying.
“And the 500 million dollars was not taken by us, it was taken by President Goodluck Jonathan in his term and that clause was there.
“Nigeria has the capacity to pay back for the period of 20 years at 2.8 per cent, which country will give you that loan? Secondly, these loans are not given to us, they are paid directly to the contractors.
“Once they sign that the job has been done, they pay the contractors and that has never happened before and this project are in place. Are they trying to rubbish the fact that there is a railway from Abuja-Kaduna?
“There is no loan in Nigeria, either internal or external that is not approved by the National Assembly, none.
“Chinese government will not even give you a loan without an approval by the National Assembly because if they give you a loan without the approval from NASS that is no loan,” Amaechi explained.
The minister further said the government needed the loans to boost infrastructure in the country.
According to him, the sovereign guarantee and sovereign immunity clause raised by the NASS is a term used to ensure that loans collected are paid back.
The minister said in the case of a default, only the assets constructed with such a loan would be taken back.
He said: “What you do is you give a sovereign guarantee and that guarantee is the immunity clause they are talking about.
“When we say, I give you a sovereign guarantee and we get immunity clause, the immunity clause is that, if tomorrow I am not able to pay and you come to collect the items we have agreed upon, that these are the items that am putting down as guarantee, I can waive my immunity and say no you can’t touch it am sovereign country.
“So, they are saying, if you are not able to pay, don’t stop us from taking back those items that will make us recover our funds.
“It is a standard clause in every agreement whether is America we signed it with, whether is Britain, any country would want to know that they can recover their money.(NAN)

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