National Assembly raises alarm over growing Chinese debts and their harsh default conditions

MEMBERS of Nigeria's Federal House of Representatives have raised concerns over the country's growing debts to China as the federal government keeps entering into loan agreements which lawmakers say could jeopardise the nation's independence.

According to the African Development Bank, Nigeria has an annual infrastructural deficit of about $100bn and with the yearly budget being only $28bn, the federal government is continuously forced to borrow to fund capital projects. Across numerous sectors including rail, airport expansion, power generation and road construction, the federal government has no choice than to borrow to fund infrastructural developments.

Yesterday, the House Committee on Treaties, Protocols and Agreements, raised the alarm on the matter, adding that it now wants to review loan facilities already taken by Nigeria from China and other countries. According to the lawmakers, Nigeria will concede some of its sovereignty if the country defaults on the repayment plans for these loans.

Transport minister Rotimi Amaechi, who appeared before the committee on the $500m loan taken on the Abuja-Kaduna and other rail line projects, however, warned the lawmakers against sending wrong signals to China. He said this might lead to abandonment of ongoing projects if the Asian country calls off the agreement.

However, Hon Nicholas Ossai, the committee chairman, faulted non-involvement of the National Assembly in loan negotiations of the federal government and its officials. He cited the loan obtained for the Galaxy Backbone to build and operate the National Information and Communication Technology Infrastructure facility, a cross-country optical fibre centre, from the China-Exim Bank in September, 2018 as an example of such loans.

Critical of the government, the committee specifically cited Article 8(1) of the agreement, which stated that: "The borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets."

Hon Ossai said: “I have also seen from the ministry of communications where Nigeria signed off some certain level of its sovereignty if part of the clauses is breached. So, when the National Assembly reacts in this manner, to question some level of agreements being entered into by any ministry of this country with any other nation, we have every right to question that because anything that is going to happen will happen to our generations unborn.”

Responding, Mr Amaechi, however, disagreed with Hon Ossai, saying the federal government could not be sending all its international deals to the lawmakers for scrutiny before they are signed. However, the committee asked Mr Ameachi to reappear on August 17 along with more details on the loans and projects.

It also summoned the communications minister Dr Ali Isa Pantani and the finance minister Mrs Zainab Ahmed, to explain the $500m loan and provide details on the agreement signed between the Federal Ministry of Transport and the CCECC. In addition, the director-general of the Debt Management Office, Ms Patience Oniha, was also summoned.