Foreign Loan : China to give Nigeria $17b Loan as IMF, ADB Fail to Cooperate with FG
Federal government on Tuesday revealed that China Exim Bank will offer $17 billion loan out of the $22.718billion for infrastructural development across the various sectors of the country’s ailing economy.
The Minister of Finance, Ahmed Zainab who made this while appearing before Senate Committee on Foreign Loan and Debt said that international creditors like the World Bank, African Development Bank failed to cooperate with Nigeria.
She explained that $17billion out of the $22.718 billion being sourced from different international creditors , is to be given by China Exim Bank alone , which represents 70% of the entire loan requests.
” Most of our rail projects are being funded by China Exim Bank on 15 to 30 years repayment plans and 5 to 7 years moratorium which we are very comfortable with ” she said .
She explained that the loans if approved , will not be spent on consumption but strictly on what they were meant for like productivity of the Nation’s economy, North East Rehabilitation , completion of the $4.9billion Mambila Power Project , extension of Nigeria Railway Network etc.
She added that the loans if approved will not in any way sink Nigeria into unserviceable indebtedness as the country is yet to exceed the 25% total debts to GDP which is even lower to 55% recommended by World Bank.
” If the projected loan is approved our rate of debt servicing will only move from 18% of total debt to GDP to 20.94 % ” , she said .
The Minister also stressed that without the loans , the problem of infrastructural deficit stiflingly the growth of the nation’s economy and development generally , will remained unattended to as revenue generation cannot in anyway tackle the problem .
” The surest way out for the country as far as infrastructural deficit are concerned , is the long term low cost loans being sought for from different international creditors since revenues cannot in anyway address the problem ” , she said.