Senate on Thursday gave nod to the $22.7 billion loan request by President Muhammadu Buhari, bringing Nigeria's external debt stock to nearly US$50 billion,
The Senate on Thursday gave nod to the $22.7 billion loan request by President Muhammadu Buhari, bringing Nigeria’s external debt stock to nearly US$50 billion, amid lawmakers and public’s concerns the approval wasThe government of Mr Buhari desperately needed the approval as African’s largest economy returns to the international debt market to shake off impacts of recession and finance the budget this year.
The certain details of the projects to be funded with the fresh loan from China are slow to emerge. However, it is believed that the Mambilla hydropower project costing nearly $5 billion will top the table. By the end of 2019, talks between Nigeria and China for a loan to finance the 3,050 Mambilla project, in Taraba State, northeastern Nigeria, had reached an advanced stage.
Already, over a quarter of Nigeria’s N10.59 trillion 2020 budget, that is N2.7 trillion, goes to debt servicing, exceeding N2.4 trillion appropriated for capital expenditure.Chinese loans are disbursed by the EXIM Bank, with interest subsidised by the country’s ministry of commerce, which assigns contractors to execute projects tied to the loans.
Since the turn of the century, China has increasingly had expansive presence in Africa as a donor and trade partner. Although the United States remains Africa’s biggest donor, China is threateningly rivalling the traditional Western donors in the latter’s historically cultivated sphere of influence, that is, Africa.
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