Abuja — The House of Representatives has demanded a review or outright cancellation of the latest China loans to Nigeria on the principle of 'force majeur' in the light of the COVID-19 pandemic which started in China.
The lawmakers added that since the National Assembly had been put in the dark on how most of the Chinese loans were taken and utilised, despite the fact that it appropriates, an investigative committees should be set up by the House to look into all extant China-Nigeria loan agreements since 2000 with a view to ascertaining their viability, as well as regularising and renegotiating them.
The decision of the House followed the adoption of a motion on the need to review and renegotiate existing China-Nigeria loan agreements, which was moved by Hon. Ben Igbakpa at the plenary yesterday.
The House resolved that: "In the light of the COVID-19 which started in China, the House Committees on Treaties, Protocols and Agreements, Finance as well as Debt Management is mandated to liaise with the Ministry of Finance and the Debt Management Office (DMO) to seek review or outright cancellation of latest China loans to Nigeria on the principle of force majeur.
"Henceforth, loans should be in tandem with statutory obligations as prescribed by the Fiscal Responsibility Act."
Earlier in his lead debate, Igbakpa said there was widespread global concern about the alleged fraudulent, irregular and underhand characteristics of Chinese loan contracts with African countries, which has resulted in a new form of economic colonialism foisted by China.
The lawmaker insisted that there was an urgent need to subject all subsisting Nigeria/China contractual loan agreements to forensic fiscal scrutiny and review.
He noted that records from DMO revealed that China emerged Nigeria's major creditor under the bilateral deals, with $2.3 billion out of $3.3 billion, adding that EXIM Bank of China is Nigeria's biggest bilateral creditor in nearly two decades, having lent the African largest economy $6.5 billion (or N1.9 trillion) since 2002.
Igbakpa stated that based on separate Freedom of Information (FoI) replies by the Finance Ministry and DMO, published by a national daily in November 2019, Nigeria has obtained 17 Chinese loans to fund projects across different sectors since 2002.
He explained that transportation and ICT sectors have six projects each financed by loans from the Chinese bank, while energy, agriculture and water sectors respectively, have three and two projects tied to Chinese loans.
The lawmaker said as at the last count, Nigeria had obtained 17 Chinese loans to fund different categories of capital projects, and Nigeria would still be serving the Chinese loans till around 2038, the maturity date for the last loans obtained in 2018.
Igbakpa noted that the first Chinese loan to Nigeria was agreed on March 27, 2002 - $114.89 million each to construct two 335 MW gas power plants, namely: Omotosho and Papalanto (Olorunshogo) in Ondo and Ogun states respectively, adding that both plants were completed in 2007.
He said the loan was obtained at six per cent interest rate and it covered 65 per cent of the costs of the project, while Nigeria then covered the 35 per cent balance.
The lawmaker noted that four months after, two other loans totalling $159.83 million for rural telephony were offered at a 3.5 per cent interest rate.
According to him, from 2006 to September 2018, the country obtained 13 more loans between 2.50 per cent and 3 per cent interest rates. The last loan obtained by the government from China was $328 million used for the National ICT Infrastructure Backbone II Project.
Igbakpa expressed concern that International Monetary Fund (IMF) had raised the alarm that most of the Chinese deals are not Paris Club compliant, and for which the World Bank has blacklisted six Chinese companies currently operating in Nigeria over alleged fraudulent corrupt practices, including deceptive tactics, illicit trade, extortion, Greek gifts and neo-colonial proclivities.