The Peoples Republic of China is now Nigeria’s biggest creditor following the federal government’s decision to borrow $17 bn from the Asian tiger.
According to the minister of finance, Zainab Ahmed, China has now become Nigeria’s creditor after other international partners, such as the world Bank and International Monetary Fund, IMF have turned down further loan request from the federal government.
Recall that the Senate has recently approved plan by the federal government to borrow $29.6bn.
More than half of that amount will come from China, it has now been learnt.
In 2019, the World Bank granted a $3bn to the federal government for the development of electricity infrastructure across the country, particularly the rural electrification projects of the Mohammadu Buhari’s administration.
After that, the world’s financial body has not been supportive of any further loan demand from the federal government, the minister said during the week, at the Senate.
Zainab also disclosed that sister agency like IMF has also turned Nigeria down during her critical time of need.
Both the World Bank and IMF are organs of the United Nations.
The minister said the federal government decided to move close to China in order to secure funds for the 2020 Budget.
The world’s most populous nation will provide $17 bn out of the $22 bn the federal government is set to borrow this time around, according to the minister.
The remaining $5bn will also be sourced from the Islamic Development Bank, she explained.
A huge portion of the $17 bn will be used to develop road projects across the country, including the completion of the Second Niger bridge.
Zainab said, “The funds ($22.8bn) will be channelled to the funding of infrastructure, which will enhance the productivity of our economy.”
Part of the loan will also be used to provide infrastructure in insurgency prone areas of the north east.
“Other projects are in healthcare and education. It also includes projects for the rehabilitation of the North- East geopolitical zone, which has been ravaged by insurgency,” she stated.
The Mambila Hydro Power project ($4.9bn), Lagos-Kano modernisation rail project ($4.1bn), the Development Finance project loan being provided by a consortium of World Bank and African Development Bank agencies ($1.28bn) will also benefit from the loan.
“Above all, the loan will help us to improve our electricity supply, reduce poverty, create jobs, ensure access to finance, agricultural productivity, guarantee food security, achieve high school enrolment, provide clean potable water, rehabilitate major roads and develop the mining industry,” the minister said.
She explained that 70 per cent of the loan from China “is meant to make funds available to our own development institutions so that they can give out loans because access to finance has been difficult for the SMEs.”
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