China, Not Nigeria’s Major Source of Funding, Says DMO
The Debt Management Office has said that China is not a major source of funding for the federal government as the total borrowing from China was only $3.121 billion at an exchange rate of $1/N361 as at March 31.
“In addition, the low interest rate reduces the interest cost to 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.
It stated that 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. On the process by which the loans were obtained, the agency noted that the principal process and requirements for borrowing by the government are expressly stated in the Debt Management Office Establishment Act, 2003 and the Fiscal Responsibility Act, 2007.
According to the statement, the Federal Ministry of Finance, Budget and National Planning works with the MDAs under whose portfolio a proposed loan is secured.
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