Chinese loans hit $4.3 billion, accounting for 84.7% of Nigeria's total loan

The total bilateral loans increased by 219.91 per cent from $1.58 billion as of June 2015 to $5.07 billion as of December 2022 while loans from China account for 84.73 per cent of the total amount Nigeria owes to other countries.

The remaining 15.27 per cent is spread across other donor countries like France, Japan, India, and Germany. As of June 30, 2022, Chinese loans accounted for 83.57 per cent of Nigeria’s total bilateral debt totalling $3.9 billion.

Information from the Debt Management Office, DMO also revealed that the Chinese loans are concessional loans with 2.50 per cent interest rates per annum. The loans also have a tenor of 20 years, and a moratorium of seven years.

China has over the years, been the main source of finance for the International Development Association, IDA countries.

In 2022, the World Bank stated that China is expected to account for 66 per cent of the debt-service payments from the IDA countries on their official bilateral debt. The IDA is a section of the World Bank that helps countries designated as the world's poorest.

It was established in 1960 and aims to reduce poverty by providing zero to low-interest loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.

In Nigeria, some of the projects listed for funding are mainly long-term construction projects which include railway, road dualization, water supply and processing plants.

The DMO in a document titled ‘Status of Chinese loans as of September 30, 2021.’ revealed the status of about 15 projects that were being funded by Chinese loans, they include; the Nigerian 40 Parboiled Rice Processing Plants Project (Fed. Min. of Agric & Rural Dev.), Nigerian Railway Modernisation Project (Lagos – Ibadan section), Nigeria Rehabilitation and Upgrading of Abuja – Keffi – Markurdi Road Project, Nigeria Supply of Rolling Stocks and Depot Equipment for Abuja Light Rail Project, and Nigeria Greater Abuja Water Supply Project.

Recall the China-Exim Bank recently declined a request to grant Nigeria a loan of $22.79 billion, the country had turned to another Chinese bank, the China Development Bank requesting to borrow $973.4 billion.