Nigeria’s debt has tripled in 7 years as China eyes Nigeria’s assets – Rights activist, Odinkalu

The rights activist, Chidi Odinkalu, has raised an alarm about the rising debt profile since President Muhammadu Buhari mounted the saddle as Nigeria’s president, which he says is seven times higher than it has previously been.

Odinkalu, who stated this in a tweet, however, did not expantiate, as he only provided an undated chart from the Nigeria Bureau of Statistics, (NBS).

According to available data from Debt Management Office, (DMO), Nigeria’s total debt profile stands at over N35 trillion, the highest since 1999 when Nigeria returned to civilian rule. The biggest lender to Nigeria remains China, which according to reports had early this month seized a critical infrastructure in Uganda recently; and people fear the same fate may befall Nigeria.

Nigeria’s indebtedness to China stands at N1.411.83 trillion ($3.402bn), according to June data from the DMO; the loan covers eleven loan facilities from China’s Ex-Im Bank since 2010. In total, Nigeria has agreed to N2.324 trillion ($5.6 billion) in loans from China. But as of March 2020, Beijing had disbursed over N1.4 trillion ($3 billion). Nigeria uses the Chinese loans to develop critical infrastructure including railways, one of which goes to Maradi, in Niger Republic, being built by the Buhari government.

Recall that recently, China seized the only International Airport in a Central African country, according to reports which were later loosely denied, fueling speculations that Nigeria’s infrastructure may yet travel the same route since the country continues to borrow. Nigeria spent N167 billion ($402.74 million) in a year and a half servicing bi-lateral loans. The country reportedly borrowed N166 trillion ($400m) to service them. The interest on the new loan is still accumulating, as it adds to the former debts. They consist of an average of 14% of the total external debt, according to the DMO.

The domestic and foreign debt figures are higher now as the government keeps borrowing more in 2021.

A recently published report had revealed that Nigeria’s external loan reached N11.786 trillion by December 2020, meaning an extra N8.827.05 trillion had been accumulated under the Buhari administration alone — three times the combined amount by past governments since 1999. For domestic debt, which is thought to be relatively slightly toxic to the value of Naira, the figure increased from N795 billion in 1999, when the Obasanjo government came to power, to N8.8 trillion in 2015 when Buhari became president.

By December 2020, Nigeria’s domestic debt stood at N16.02 trillion — twice as much as the total amount taken by the past three governments of Obasanjo, Yar’Adua and Jonathan.

Recall that the Nigerian leader sought approval from the National Assembly to borrow $4,054,476,863.00, €710 million and a grant of $125 million. In a letter read by the Senate resident, Ahmad Lawan, President Buhari explained that the loan sought is to finance critical projects in the 2021 Budget.

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