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Foreign debt: FG denies losing property to China in debt repayment

Foreign debt: FG denies losing property to China in debt repayment - the federal government, the federal, the china exim, Property, debt repayment, debt, China

By Idu Okechukwu, Abuja

government of Nigeria has allayed the fears of many Nigerians who have expressed reservation about the financial assistance being given to the country by Bank known to deploy takeover by the Chinese in cases of default in repayment.

has taken over infrastructure in some African countries that could not repay their debts. Sri Lanka, Zimbabwe, Kenya among other countries are facing pressure of forfeiting their infrastructure to over unpaid .

The minister of transportation, Rotimi Amaechi, said, on Monday in Nairobi, Kenya at the 6th Annual East African Transport Infrastructure conference that the agreements Nigeria entered into with bank do not include takeover in case of default.

According to him, ‘I don’t know the arrangement these countries made with Exim bank, I do not think we will have any problems with repaying our loans. “The countries that they are talking about are Kenya, Somalia and Sudan. These are some countries that have not been able to repay their loans, I think. So, what they () are doing is that, they are taking over to manage and get their money but it’s not so in Nigeria“.

He said “In fact, it’s affecting our ability to borrow and they are now saying look, we can’t lend to you because these people are not ready to pay back. How do we know you are going to pay back!”.

“We are talking with them to have a meeting with them to say that by June, we should be able to say this is our repayment plan. It also depends on what agreement plan you have with them; our agreement does not include the fact that they will come and take over our sea ports or railways or airports.

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“We believe that we can pay back using our own money. That shouldn’t be any problem, our focus should be to run this infrastructure efficiently so we can pay back and there is no plan for them to manage any of it” he stated.

Amaechi lamented that, “If you don’t go to China, who will give you money! America is going to China even Russia, what is wrong if Nigeria goes to China, I think we should not be afraid of China”.

The minister explained that “nobody runs railway with passengers fare. You can never get one naira out of it. Nigerians think railway is just to carry passengers but the problem is that the goods that should be on the rail are the ones on the road and it’s destroying the road. Once we conclude the rail projects and those goods are transferred to the rail, that is when we will start making money to pay our debts.

“Currently our trains are carrying passengers. People are celebrating Lagos-Ibadan because they are looking at it that oh, I’ll just jump into the train and one hour, I’m already in Ibadan. That’s not the overall aim. The reason why government said we must get to the sea ports is to decongest the Apapa sea ports. That’s where the money lies” he noted.

Amaechi said government was entering partnership with another Chinese company. “They came to see me two days ago. The company is to raise 10% of the equity, will raise 15% while the remaining 75% is to be borrowed, not by but by the company because we formed a Special Purpose Vehicle (SPV) with which we will run the contract.

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The SPV is a company that will run that contract. This company will run the contract, complete it and run the business. They will borrow money to run the business and pay back the loan”.

Also speaking, the director of operations with the Nigerian Railway Corporation (NRC), Niyi Alli, said the country’s rail system had fallen from what it used to be many years ago. According to him, Nigeria “had total over 3,500 kilometers of narrow-gauge lines with over 350 bridges, 20 quarries, 300 stations, over 250 different classes of locomotives and over 3,500 vehicles for passengers”.

He stated that freight and special purposes increased economic activities along the corridors and developed villages into commercial towns. It also “Moved over 3 million tons of freight, had a number of workshops, running sheds, warehouses, storage tanks across the network moved about 15 million passengers per annum.”

Alli lamented that the railway “employed over 45,000 direct and over 250,000 indirect employment when the Nigerian population was about one third of what it is today”.

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