Revealed:  These Nigeria’s assets risk China takeover

The fear of China taking over national assets has now pervaded the entire African continent, as several African nations stand the risk of losing their sovereignty to this big creditor.

The case of Zambia readily comes with some of its national assets already being taken over by China following defaults on loan payments.

Zambia is not the only African country with Chinese loans hanging around its neck, Nigeria also has over $5bn. To be fair, Nigeria sets aside a reasonable percentage of its budget for debt servicing yearly, and most likely would not fail to service its Chinese debts.

However, National Daily takes a look at key Chinese-loan-funded infrastructural projects in the country, which might be taken over by China, in case Nigeria defaults in its debt repayment.

The Abuja Urban rail system is one of such projects. This $500 million rail project was constructed with loans sought from China and happens to be the first urban rail system in the entire West African sub-region. The rail was commissioned in July this year.

Abuja-Kaduna rail system is another $500 million Chinese-funded rail system that has been completed and operational in Nigeria. The 180km rail line connects Abuja and Kaduna and was commissioned about two years ago.

In 2013, Nigeria secured a $500 million loan from China at 2.5% interest rate, for the construction of four international airport terminals in Abuja, Kano, Lagos and Port Harcourt, after signing a Memorandum of Understanding with China Exim Bank.

The MoU for the loan was signed in Beijing, with the delivery of the four new International airport terminals to be constructed by the China Civil Engineering Construction Corporation (CCECC).

The Lagos-Kano rail line is part of the recent $3.4 billion Chinese loan to construct infrastructural projects in Nigeria. Though the rail line is an extension of the Lagos-Ibadan standard rail gauge, it is to be funded with about $6.1 billion loan to be used on Ibadan-Ilorin-Minna-Kaduna- Kano line.

Zungeru Hydroelectric power project is a $1.2 billion loan power plant that is currently under construction by the China Electric Engineering Company (CNEEC).

The Hydro Power Plant will produce 700MW of electricity and it is a joint project between Nigeria and the Chinese government at a financial contribution ratio of 25/75 per cent respectively.

A sum of $1.6 billion was secured from the China Exim Bank by the current government for the construction of this standard gauge Lagos-Ibadan rail line that will connect Nigeria’s commercial capital, Lagos to Ibadan.

The Export-Import Bank of China also provided a loan of $328 million to support Nigeria’s National Information and Communication Technology Infrastructure Backbone Phase 11 (NICTIB 11) between Galaxy Backbone Limited and Huawei Technologies Limited (HUAWEI).

National Daily gathered that less than three months ago, Nigeria signed an additional $1 billion loan from China for additional rolling stock for the newly constructed rail lines, as well as road rehabilitation and water supply projects.

Meanwhile, the Federal Government has dismissed insinuations of the possible takeover of the economy, by the Chinese Government, if it defaults on loan terms.

According to a statement issued by the Debt Management Office (DMO) last month, Chinese loans are cheaper compared to other international bodies and agencies and there is no risk of default on the Chinese loans.

“The public should be assured that Nigeria’s public debt is being managed under statutory provisions and international best practices, and there is no risk of default on any loan, including the Chinese loans,” the statement said.