…Says it constitutes 3.94% of $79.3 total public debt

…Got FEC, NASS approvals

The Debt Management Office, DMO, said yesterday that the total borrowing by Nigeria from China was $3.121 billion (N1,126.68 billion at USD/N361), as at March 31, this year. This amount, it explained, in a statement, was only 3.94% of Nigeria’s total public debt of $79.303 billion (N28,628.49 billion at USD/N361) at the end of the first quarter.

Similarly, external sources of funds, loans from China, the Office said, accounted for 11.28% as at the time under review and that China was not   a major source of funding of the federal government. Terms The   DMO said that the loans were concessionary, with   generous low-interest terms     and that there was nothing to worry about, with regard to Chinese loans to Nigeria. The loans were taken on interest Rates of 2.50% p.a., Tenor of Twenty (20) years and Grace Period (Moratorium) of Seven (7) years.

“These terms are compliant with the provisions of Section 41 (1a) of the Fiscal Responsibility Act, 2007. In addition, the low interest rate reduces the Interest Cost to Government, while the long tenor enables the repayment of the principal sum of the Loans over many years. ‘’These two benefits make the provisions for debt service in the Annual Budget lower than they would otherwise have been if the loans were on commercial terms,” it said. Utilisation According to the debt management agency, the $ 3.121 billion loans are project-tied. ‘’They included Nigerian Railway Modernization Project (Idu-Kaduna section), Abuja Light Rail Project, Nigerian Four Airport Terminals Expansion Project 2 (Abuja, Kano, Lagos and Port Harcourt), Nigerian Railway Modernization Project (Lagos-Ibadan section) and Rehabilitation and Upgrading of Abuja – Keffi- Makurdi Road Project,’’ DMO added. It stated that the procedure for obtaining the loans met laid down criteria and was fully transparent.

Source: Vanguard