• Monday, May 20, 2024
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FG clarifies clause on $400m loan agreement with China Exim Bank

FG clarifies clause on $400m loan agreement

The Minister of Transportation, Rotimi Amaechi, on Wednesday, said clauses in Article 8(1) of the commercial loan agreement signed between Nigeria and Export-Import Bank of China, in the $400 million loans for the Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Project, is ceding sovereignty for asset recovery.

Amaechi made the clarifications following concerns that Nigeria was ceding part of its sovereignty to China on account of the loan.

Speaking with journalists during the assessment of resumption at the Idu- Abuja railway station, Amaechi explained that the clause is not ceding sovereignty in the technical sense but providing some relief to enable China to take over assets for loan recovery if and when necessary.

The minister has already been summoned to appear before the House of Representatives on August 17 to explain the controversial clause.

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“I have told the House of Representatives that it is a clause in the loan agreement. Like the loan for the construction of Ibadan to Kano rail is $5.3 billion, the implication is that if we can’t pay the money, whatever they need to take from us they would without us talking about our sovereignty,” Amaechi said.

“Most times what the Chinese do is to go after the asset that has been constructed and then use it to recover their money, so what’s wrong with that? You are asking for 5.3 billion dollars and they are asking you to give that sovereignty that would ensure they get back their money, if you say no, what other assurance do you give?” he asked.

It would be recalled that the house of representatives summoned Amaechi alongside Minister of Communication, Ali Isa Pantani; and Minister of Finance, Budget and National Planning, Zainab to provide answers on $500 million loan to be sourced from the Export-Import Bank of China for railway lines in the country.

They are also to provide details on the agreement signed between the federal ministry of transport and the China Civil Engineering Construction Corporation (CCECC) in respect of some railway projects in the country. The projects involved are the Abuja-Kaduna, Lagos-Ibadan, Ibadan-Kaduna and Kaduna-Kano railways lines.

Ameachi while justifying the loan, warned that China might not give the loan if lawmakers keep investigating the agreement.

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“If the National Assembly thinks that is wrong, then they should tell us how to get the money to build the infrastructures. if the infrastructures have been built before now, we wouldn’t be asking for this. the infrastructures include schools, we need to have an educated class bet, unfortunately, you can’t do that without growing the economy and one of the infrastructures that would grow the economy is transportation”

“There is nothing wrong with the investigation but we shouldn’t jeopardize the ability of government to raise money by asking those questions that would make China say what is wrong otherwise. we could lose the money we are asking for.”

Meanwhile, as operations resumed, rail passengers on the Abuja-Kaduna corridor expressed displeasure over 100 per cent hike in price, pleading to the government for a downward review.

Speaking with Bussiness day at the Idu-Abuja rail station, one of the passengers, Kadijat Sani said, “Honestly the price is too high. We agree that an increment is required but it shouldn’t be this high. Government ought to consider us.

“The Pandemic affected everybody, we shouldn’t bear the burden alone, the government should please do something about the price. If nothing is done most travellers would be forced to travel by road and that is not really safe.”

However, responding to the passengers’ complaints, Amaechi who was present to ensure full compliance to the Covid-19 Safety measures said the increment was necessary to cover running cost.

“There is no budgetary provision for running cost, we run from the returns we get from the rails. For health concern we reduced numbers of passengers, the government has no money to subsidize, passengers just have to bear it,” he insisted.