• Monday, March 04, 2024
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Alleged diversion of $1bn Chinese rail loan untrue – Okonjo-Iweala


okonjo-IwealaNgozi Okonjo-Iweala, Nigeria’s immediate past minister of finance, has refuted reports alleging that the $1 billion Chinese rail loan was diverted to other projects under her watch.

Okonjo-Iweala said the allegations were not true on the grounds that the Kano-Lagos rail project was not funded by the alleged China-EximBank loan and as such the issue of diversion of the said loan should not arise.

The China-Exim Bank keeps and disburses funds for approved projects to contractors based on milestones and as such funds are not domiciled with the Finance Ministry, she said.

There were reports last week that President Muhammadu Buhari queried the Ministry of Finance over alleged diversion of a substantial part of $1.005 billion loan obtained from the Chinese Exim Bank for the construction of a rail line linking Lagos to Kano. Buhari sought the explanation when Mohammed Bashar, permanent secretary, Ministry of Transport, briefed him on the ministry’s activities at the Presidential Villa, Abuja.

But Okonjo-Iweala, speaking through Paul Nwabuikwu, her media adviser, said the response became necessary following several media inquiries on the matter since the story broke on the said allegations made by Bashar.

“I want to state categorically that there is no truth in the reported allegation. Anyone who is interested can cross check with the China-Exim Bank or the Chinese Embassy.

“The alleged diversion has no substance for the simple reason that the Kano-Lagos project was not even among the projects presented for funding by the China-Exim Bank for several strategic infrastructural projects across the country,” Nwabuikwu said in a statement.

He explained that it was actually the Lagos–Ibadan rail project, not Lagos-Kano rail project that was proposed in the original application to the China-Exim Bank. But in the end, the China-Exim Bank assigned no funds for the Lagos-Ibadan rail project.

Clarifying further, Nwabuikwu said the following projects, including $500 million for the expansion of four international airport terminals in Lagos, Kano, Abuja and Port Harcourt; $500 million for the Abuja Light Rail project, and $984 million for the Zungeru Hydro-electric power project, were being funded from facilities obtained from the China-Exim Bank, and were at various stages of completion.

The $100 million for the Galaxy Backbone project is also part of the projects being funded by the Chinese loan, he said, noting that these projects could be verified.

“It is also important to note that even if the alleged project was on the list of China-EximBank funded projects, diversion of any Chinese funds would have been extremely difficult because the terms of the contract and the processes would simply not have permitted such action,” he maintained.

The procedure, according to him is that funds for approved loans remain in the China-EximBank and are released directly to the Chinese firm executing the contract only after the presentation of duly certified proof of work by the responsible Ministry, which in this case would be the Federal Ministry of Transport, based on the agreed milestones.

“For the sake of emphasis, the China-EximBank does not disburse money directly to government and therefore the issue of diversion does not arise.” Nwabuikwu maintained.

In the statement, Nwabuikwu raised concerns that even though President Buhari, in his reported comments on the allegation, made no reference to Okonjo-Iweala but rightly stressed the need for due process and transparency in the execution of public projects, a sponsored media campaign has once again been launched by political elements to make the former Minister “the culprit in a non-existent scandal.”
“This is yet another example of the kind of whispering campaign of calumny, innuendo, misinformation, and outright distortions being perpetrated by certain political elements against Dr. Okonjo-Iweala in a bid to try to damage her reputation,” he claimed.