The House of Reps has resolved to set up an investigation committee to look into all extant China/Nigeria loan agreements since 2000; with a view to ascertaining their viability; regularising; and renegotiating them.
This was sequel to a unanimous adoption of a motion by Rep, Ben Igbakpa (PDP-Delta) at the plenary on Tuesday, May 12.
Moving the motion earlier, Igbakpa said that the National Assembly; the arm of government responsible for appropriation had been kept in the dark on how most of these Chinese loans were collected and utilised.
He said there is widespread global concern about the fraudulent, irregular and underhand characteristics of Chinese loan contracts with African states.
According to the Reps, it has resulted to a new form of economic colonialism foist by China; there is an urgent need to subject all subsisting Nigeria/China contractual loan agreements to forensic fiscal scrutiny and review.
He said that records from Nigeria’s Debt Management Office (DMO) revealed that the People’s Republic of China emerged Nigeria’s major creditor under the bilateral deals with $2.3 billion out of $3.3 billion.
Igbakpa said that the EXIM Bank of China is Nigeria’s biggest bilateral creditor in nearly two decades; having lent the African largest economy $6.5 billion (N1.9 trillion) since 2002.
“Transportation and ICT sectors have six projects each financed by loans from the Chinese bank; while energy, agriculture and water sectors, respectively; have three and also two projects tied to Chinese loans.
“According to the Daily Post of Sept. 5, 2018, the first Chinese loan to Nigeria was agreed on March 27, 2002, as follows; $114.89 million each for constructing two 335 MW gas power plants; namely Omotosho and Papalanto (Olorunshogo) in Ondo and Ogun States, respectively.
“Both plants were completed in 2007; the loan was obtained at six per cent interest rate; and it covered 65 per cent of the costs of the project; while Nigeria then covered the 35 per cent balance.
“Four months after, two other loans totalling $159.83 million for rural telephony were offered at a 3.5 per cent interest rate.
“Then from 2006 to September 2018, the country obtained 13 more loans; at between 2.50 per cent and three per cent interest rates.
“The last loan obtained by the government from China was $328 million used for the National ICT Infrastructure Backbone II Project.
“At the last count Nigeria has obtained 17 Chinese loans to fund different categories of capital projects and Nigeria would still be servicing the Chinese loans till around 2038; the maturity date for the last loans obtained in 2018,” he said.
The legislator expressed concern that the IMF as reported in the Guardian of Nov. 3, 2019, had raised the alarm that most of the Chinese deals are not Paris Club compliant; and for which the The World Bank has blacklisted six Chinese companies currently operating in Nigeria.
The Reps said that amidst widespread allegations of heavily inflated Chinese contracts and fears expressed by stakeholders that most of the projects allegedly did not follow extant regulations; particularly the Public Procurement Act, which enforces tendering or competitive bidding.