Rotimi Amaechi, Nigeria’s Transport Minister has assured that the country is not in any way ceding its sovereignty to China in a current $22.5b loan agreement. He has therefore asked the National Assembly of Nigeria to stop its ongoing probe into the loan.
The minister, in his defense comments, explained that “the terms contained in the agreement is not as if we are signing off the country’s sovereignty. What we do is that we give a sovereign guarantee, which is an immunity clause. The clause is that in case the country defaults, China will come to collect the items agreed upon,” The Guardian, reported. Ameachi is asking the national assembly to allow for the acquisition of the loan while the investigation is ongoing. This arrangement, according to him, is important because “the investigation being carried out by National Assembly may frustrate the loan agreement between us and China on the Port Harcourt to Maiduguri rail project. So, if tomorrow we are unable to construct the Port Harcourt to Maiduguri railway because we didn’t get the loan, it is because of the investigation by the National Assembly.”
Nigeria’s federal government is seeking approval from the national assembly on a $22.5b Chinese loan, whose interest rate of 2.8 percent spans 20 years with a seven-year moratorium. It is an infrastructural loan agreement purposed for the construction of a $5.3b Ibadan-Kano railway line, $3b Port Harcourt to Maiduguri, $11.1b for Lagos-Calabar and $3.5b for Abuja to Itakpe.
However, the Human Rights Writers Association of Nigeria (HURIWA) has opposed the loan deal, stating that, “the history of Chinese loans, especially in Africa, has become a growing concern, as several observers, including the United States representatives, have warned many nations on what they described as Chinese debt-trap diplomacy, as the Asian nation allegedly used finance as a weapon in many developing countries.” The group further argued and warned that Chinese loans are tied to infrastructural developments, and some African nations have had to forfeit their stakes in the infrastructure, which they used as collateral, after they defaulted. In the 2018 Forum for Africa – China Cooperation, FOCAC Nigeria’s president Mohammed Buhari stressed that the country’s relations with China falls within relevant economic plans of the government and that Nigeria was not being trapped by Chinese money. But experts have counter-argued that Nigeria lacks accountability, transparency, and responsibility to refund its loans, hence the country risks falling into China’s debt-trap.
