During hard times, most countries survive by seeking help from others, usually through loans to achieve economic growth and development.
Fourteen years ago, the former President of Nigeria, in the person of Olusegun Obasanjo, and his economic team led by Dr. Ngozi Okojo Iwela, saw to it that the country was out of the debt-trap of the 1980 and 1990s respectively. Now, Nigeria is once again in the unending tunnel of debt with absolutely no idea how to exit as the government keeps borrowing and diving deep into the tunnel.
In a new study made by the China government, it shows that the total loan of Nigeria as of March 31, 2020, was USD3.121 billion (#1,126.68 billion at USD/ #361). The amount represents only 3.94% of its total public debt of USD 79.3030 billion (#28,628.49 billion at USD/361) within the stated duration.
The current Minister of Finance said Nigeria had to request a loan from the China- Exim Bank when other banks such as African Development Banks (AfDB) and other lending institutions failed to grant loans to the country during the past economic recession of the country. The loan approval that got rejected by lending institutes was a means for the President to fund critical infrastructure in the country, which is: The Nigerian Railway Modernization Project (Idu-Kaduna section), Abuja Right Rail Project, Nigeria Four Airport Terminals Expansion project (Abuja, Kano, Lagos, and Port Harcourt), Nigerian Railway Modernization Project (Lagos-Ibadan section), and lastly the Rehabilitation and upgrading of Abuja- Keffi- Makurdi Road Project.
The purpose of these projects is to ease the transportation of goods and properties and also to make life more comfortable for the citizens. The Ibadan railway, for example, will reduce the traffic on the Lagos-Ibadan Expressway once the project gets completed. Likewise, the new International Airport and the Idu- Kaduna Rail line in their respective ways. Reports state that Nigeria will continue to remit the Chinese loans until 2038, which is the maturity date for the last loans obtained in 2018.
Can the government pay off her debt? Correspondingly, the history of Chinese loans, especially in Africa, is of growing concern. The United States of America, the United Kingdom, and Germany have warned many Africa nations on what they described as Chinese Debt-trap diplomacy. As an Asian nation, it is believed that China allegedly used finance as a weapon in many developing countries. The loans which tied to infrastructural developments, most of the African nations have had to forfeit their stakes in the infrastructure, which they used as COLLATERAL after they defaulted. Countries such as Kenya, Srilanka have fallen into this Debt-trap. The West African Nation, Kenya, might lose its largest and most lucrative port to china (Port Mombasa) after it defaulted on the refund. These could force Kenya to relinquish control of the port to China. How safe are we?...more:
https://veegil.com/t/the-nigerian-government-loans/396?u=onye.mercy
#Nigeria #debt #government #loans #veegil