Opinion: Nigeria and the Chinese Debt Empire, By Ebere Onwudiwe
As the minister of Finance painfully explained, the federal government had to slash its aggregate expenditure budget by N88.412 billion, decrease statutory transfers by N162.6 billion, and reduce the overhead costs of ministries, departments and agencies of government by N61.52 billion.
As the minister of Finance painfully explained, the federal government had to slash its aggregate expenditure budget by N88.412 billion, decrease statutory transfers by N162.6 billion, and reduce the overhead costs of ministries, departments and agencies of government by N61.52 billion. But while these belt-tightening fiscal measures were being taken, debt service allocation increased from N2.453 trillion to N2.
While some of the shouting in the House of Representatives against the lack of transparency of Chinese loans may be opposition politics, the danger of opaque loan agreements from China cannot be dismissed. This is because opaque lending agreements hide lending conditions, and that can make it difficult to know Nigeria’s actual debt burden. And this is not the only problem.
There are important issues of accountability and probity, all linked to transparency. The absence of transparency can be disastrous to good governance and economic growth in Nigeria. Whether they are loans from China or from anywhere else, opaque loan contracts and under-stated loans are not good for Nigeria. They weave the fabric of corrupt and predatory external loan practices that can undermine self-government.
Some 27 or so years ago, Paul Johnson, surveying the crumbling of many governments into failed states unable to meet the basic needs of their citizens, wrote a column in theheadlined, “Colonialism is back—and not a moment too soon”. In it, he declared with a gusto that some countries are simply not fit for self-rule. Most Westerners did not agree with Johnson then, nor did China… then. Still, it is wise to remember that colonisation is not always planned or achieved through the Maxim gun.
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