Nigeria's External Debt Triples as China Eyes Nigeria's Assets


Alt: = "President Muhammadu Buhari"

A Rights activist, Chidi Odinkalu, says Nigeria’s debt profile has risen three times in the last 7 years, that is since Muhammadu Buhari became Nigeria’s president. 

Odinkalu said this in a tweet but did not expantiate as he only provided an undated chat from the Nigeria Bureau of Statistics (NBS). 

Available data from Debt Management Office (DMO) which says Nigeria’s debt profile has soared to about N35.65 trillion recently because of increased borrowing by Buhari's government justifies Odinkalu's claim.

Out of this sum, Nigeria’s indebtedness to China stands at N1.411 trillion ($3.402 billion), according to June data from the DMO. The loan covers 11 loan facilities from China’s Exim Bank since 2010. Nigeria has N2.324 trillion ($5.6 billion) total loan agreement with China, out of which China had disbursed over N1.4 trillion ($3 billion) as at March 2020. Nigeria uses the Chinese loans to develop critical infrastructure including railways, one of which goes to Maradi in the Niger Republic, being built by the Buhari's government. 

Recently, China took over the only International Airport in a Central African country, Uganda according to reports which were later loosely denied, fuelling speculations that Nigeria’s infrastructure may be visited with same fate, since the country continues to borrow, the Source Magazine said. 

Nigeria spent N167 billion ($402.74 million) in a year and a half servicing bilateral loans, which take about 73% external revenue for same period. The country borrowed N166 trillion ($400m) to service them. Interest keeps accumulating. The interest on the new loan is still accumulating, as it adds to the former debts. They consist of an average of 14% of the total external debt, according to DMO. 

A report by Premium Times equally says Nigeria’s external loan reached N11.786 trillion by December 2020, which means a total of N8.827.05 trillion had been accumulated under the Buhari administration alone — three times the combined amount by past governments since 1999. 

For domestic debt, which is thought to be relatively toxic to the value of Naira, the figure increased from N795 billion in 1999 when the Obasanjo’s government came to power, to N8.8 trillion in 2015 when the Buhari became president. By December 2020, Nigeria’s domestic debt stood at N16.02 trillion — twice as much as the total amount taken by the past three governments of Obasanjo, Yar’Adua and Jonathan. 

The domestic and foreign debt figures are higher now as the government keeps borrowing more in 2021. President Buhari recently sought approval from the National Assembly to borrow $4,054,476,863.00, €710 million and a grant of $125 million. In a letter read by the Senate president, Ahmad Lawan, President Buhari explained that the loan sought is to finance critical projects in the 2021 budget. 

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