Nigeria Owes China $3 Billion as at March 2020 – World Bank


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World Bank says  total amount Nigeria has so far borrowed from China as of March 2020 was $3.121 billion (₦1,126.68 trillion at USD/₦361).

This amount represents only 3.94 % of Nigeria’s total public debt of $79.21 billion as of September 2021.

Also, in terms of external sources of funds, loans taken from China accounted for 11.28% of the External Debt Stock of USD27.67 billion as of the same period.

The total loans from China of USD3.121 billion as of March 31, 2020, are concessional loans with interest rates of 2.50 per cent per annum with a tenor of 20 years and a moratorium of seven years, according to the document released by World Bank.

“These terms are compliant with the provisions of Section 41 (1a) of the Fiscal Responsibility Act, 2007. In addition, the low-interest rate reduces the interest cost to the government while the long tenor enables the repayment of the principal sum of the loans over many years. These two benefits, make the provisions for debt service in the annual budget lower than they would otherwise have been if the loans were on commercial terms,’ the document, read.

“The $3.121 billion loans, the document, explained, are project-tied loans. The projects, (eleven – 11 in number as at March 31, 2020), include the Nigerian Railway Modernisation Project (Idu-Kaduna section), Abuja Light Rail Project, Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos and Port Harcourt), Nigerian Railway Modernisation Project (Lagos-Ibadan section) and Rehabilitation and Upgrading of Abuja – Keffi- Makurdi Road Project.

“The impact of these loans is not only evident but visible. For instance, the Idu – Kaduna Rail Line has become a major source of transportation between Abuja and Kaduna. Also, the new International Airport in Abuja has improved air transportation for the populace, while the Lagos – Ibadan Rail line when completed, will ease traffic on the busy Lagos-Ibadan Expressway.

“The projects also have the added benefits of job creation, not only by themselves but through direct and indirect service providers, a number of which are Small and Medium Enterprises,’ the document, further explained.

Although these loans are project-tied, Nigerians have shown much worry and have rejected President Muhammadu Buhari request for more  loans, 

In defense, the Minister of Finance Budget and National Planning, Zainab Ahmed, has said that “Nigeria’s debt is still very much within sustainable limits.

“We need to roll out infrastructure now, and grow the economy now – not later.”

Recently, President Buhari wrote to the National Assembly, requesting  approval to borrow the sum of $4,054,476,863 and €710 million, a move that generated uproar.

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