A Non-Governmental Organisation (NGO) devoted to better governance in Nigeria, Transforming, Uplifting and Reforming Nigeria (TURN) has urged the Federal Government, in the spirit of transparency and accountability, to
reassure Nigerians that none of the country’s national assets will be at risk in the case the country defaults in paying the loans obtained from China.
In a statement signed by AG Ahmed; Nelson IIrobi and Olusola Womiloju; President; Vice President, Administration; and Vice President, Finance respectively, the Canada-based organisation said it is concerned about the indebtedness of the Nigeria to China and the reported enslaving terms of conditions which Nigeria agreed to in order to secure the loans.
“Nigeria’s external debt loan stands at $31.98 billion (Debt Management Office, DMO,
September 30, 2020), most of which are owed to well-known international creditor agencies
with which Nigeria has had a long history of dealing, like many other developing countries.
“In contrast, the bilateral loans which are owed to individual countries are of concern, and none is as worrisome as the unprecedented yet increasing sum of money owed to China which now stands at $3.3 billion or 80.1% of Nigeria’s bilateral debt loan of $4.1 billion. What does this mean to a country like Nigeria? What risk is Nigeria facing with her indebtedness to China?
“The IMF has warned Nigeria of her increasing indebtedness to China. TURN’s evaluation of
Chinese “investments” in Nigeria represents a sordid and unsustainable state of affairs that
can in the end only hurt the Nigerian people. All loans from China are claimed to be on
concessional terms according to the DMO,” the statement said.
The group, however, noted that the details of the loans are shrouded in secrecy, adding that the demands of Nigeria’s Fiscal Responsibility Act (FRA) for concessional loans have not been transparently met.
“The risks associated with the Chinese loans constitute clear, present and future danger despite the relatively small proportion of the loans to Nigeria’s overall debt,” it said.
The statement recalled that the House of Representatives Committee on Finance held hearings into the conditionalities surrounding “these loans only to be shut down by powers from above.”
“Numerous questions and concerns surrounding these loans have remained
unanswered. The patriotic efforts of the Socio-Economic Right and Accountability Project
(SERAP) including legal recourse have not elicited even a polite acknowledgement from the government. To that end, there is the need for all well-meaning Nigerians to hold the
government to account and demand answers.
“Nigeria is our own and we must collectively protect and nurture her to good health by getting involved in the process of redeeming and restoring to its greatness.
“For example, we ask that the government should provide answers and not hide the details of the $460 million loan used to fund the Abuja CCTV, a project that has spectacularly failed?
Why will the Minister of Finance not disclose contractors paid for this project? TURN insists
that it is unacceptable that any project funded by loans that Nigeria will have to pay back be
tainted with fraud and shrouded with a cloak of secrecy.
“To the detriment of Nigeria, these loans are used for projects that end up promoting economic activities in China as the Chinese companies employ mostly Chinese citizens, with money that will have to be paid back by Nigeria. The loans minimally translate to Nigeria’s benefit as the control of all related activities are not in the hands of Nigerians. These are examples of direct foreign “investments” that negatively contribute to the Gross Domestic product as the
valuable economic resources are promptly evacuated from Nigeria by foreigners. These
trends need to be reversed. TURN would like to see concrete actions and a government white
paper issued to address the concerns outlined above.
“Going forward, TURN would like to see the Federal Government conduct rigorous and transparent evaluation of all current and active loans. Government needs to involve experts from the private sector to evaluate the risks and benefits of a loan and take all necessary steps to ensure that it truly benefits the country.
“TURN would like to see periodic review, monitoring and reporting by the Ministry of Finance or Presidency regarding Nigeria-China Loan agreements to ensure continued relevance for intended purpose and meeting regulatory scrutiny.TURN believes that loans taken by the government should not mortgage the future of the citizens or that of the unborn generation.
“TURN is requesting that the terms and conditions of all loans be made publicly available and for the government to commit to the renegotiation of the terms and conditions that are inimical to Nigeria’s socio-economic progress. We ask that the Nigerian government take the necessary precautions to avoid debilitating and harrowing conditions that the citizens may face with a creditor that might endanger our sovereignty.
“Nigeria is our own and we must collectively protect and nurture her to good health by getting involved in the process of redeeming and restoring to its greatness,” the statement added.