Chinese loans now worth $3.59bn – DMO

The Debt Management Office has clarified that China’s loans to Nigeria, which total $3.59 billion, account for only 9.4% of the country’s total foreign debt stock of $37.9 billion.

Ms Patience Oniha, the Director-General of the DMO, stated this in an interview with the News Agency of Nigeria on Saturday in Abuja.

She also clarified that the loans were mostly subsidized because no national assets were used as collateral.

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According to NAN, news about some African countries, including Nigeria, facing the threat of losing some critical national assets to the Asian country due to high levels of indebtedness has recently flooded both social and mainstream media.

“As of September 30, Nigeria’s total debt stock was $37.9 billion, which included the external debt stock of the Federal Government, 36 state governments, and the Federal Capital Territory.

“However, China’s total loans amount to $3.59 billion, accounting for 9.47 percent of the country’s total external debt. The loans were largely concessional and did not require any national assets as collateral,” she said.

Oniha urged Nigerians to always seek official confirmation of sensitive information before disseminating it.

She explained that before foreign loans were contracted, multiple government institutions took very careful steps to ensure that they were beneficial to the country.

“Before any foreign loan is contracted, including the issuance of Eurobonds, the Federal Executive Council must first approve it, followed by the National Assembly.”

The approval of loan agreements by the Federal Ministry of Justice is an important and crucial step.

“Before the agreements are signed, the Attorney-General of the Federation and the Minister of Justice issue an opinion.”

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“Several measures have been put in place that work together to ensure that debt data is available and that debt is serviced when it is due. Annual budgets include explicit debt service provisions,” she explained.

Oniha explained that the loan agreements laid out a series of steps to follow in the event of a dispute.

“The parties should try to resolve it among themselves first, and if that fails, they should go to arbitration.”

“In other words, a lender, in this case China, would not seize an asset at the first sign of a dispute, including defaults,” she explained.

She explained that the DMO kept accurate debt records, projected debt service payments, and processed actual debt service payments.

She noted that those responsibilities were shared with the Office of the Accountant-General of the Federation (OAGF) and the Central Bank of Nigeria (CBN).