Activists kick as FG secures N176bn Chinese loan

SEPTEMBER 13, 2012 BY EVEREST AMAEFULE AND IFEANYI ONUBa

Punchng.com

 

Many Nigerians on Wednesday expressed worries as the Federal Government secured a fresh $1.1bn loan (about N176bn) from the China Export Import Bank for the financing of railway and airport projects.

The facility was obtained on a concessionary interest rate of 2.5 per cent, repayable in 20 years with a grace period of seven years.

The agreement for the loan was signed in China by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and Managing Director, China Exim Bank, Mr. Sun Ping.

Ministers of Aviation, Federal Capital Territory and Minister of State for Works, Ms Stella Oduah, Mr. Bala Mohammed and Ambassador Bashir Yuguda, were also in the Nigerian team, which worked on the final details of the agreement with officials of the bank in Beijing on Wednesday.

Also present were the Director-General, Debt Management Office, Dr. Abraham Nwankwo, and Special Adviser to the President on Performance Monitoring, Prof. Sylvester Monye.

A statement from the Senior Special Assistant to Okonjo-Iweala, Mr. Paul Nwabuikwu, said of the $1.1bn loan, $600m (N96bn) would be used to finance two high priority projects that were expected to be completed by 2015.

The two projects are the Abuja light rail estimated to gulp $500m (N80bn) and the Galaxy Backbone Information and Communications Technology infrastructure at a cost of $100m (N16bn)

The agreement will also enable the Chinese bank to finance the third project, which is the construction of four state-of-the-art airport terminals in four cities across the country.

The airport terminals, which will gulp $500m (N80bn), will be located in Abuja, Kano, Port Harcourt and Enugu.

There is, however, contradiction on the airport project. The Aviation minister had last week told journalists that the Federal Government had secured N106bn from the China Exim Bank for the construction of 11 airport terminals across the country.

When contacted on the contradiction, the Special Assistant (Media) to the Minister of Aviation, Mr. Joe Obi, insisted that the loan was for the construction of five passenger terminals and six cargo terminals.

“As at the time we gave the information, it was correct. I don’t know whether a change has occurred. I know the two ministers had been working on it. I am not aware that it is now four airports. I cannot explain the contradiction unless I speak with my principal, and as you know, she is currently in China,” Obi said.

There were doubts over the capacity of China and the Federal Government to deliver on the projects going by precedence.

Utilising a loan of $200m, two Chinese firms, ZTE and ASE, had purportedly built rural telephony projects across the country with counterpart funding of 15 per cent from the Federal Government.

Another Chinese firm, China Great Wall Industry Corporation, had also in 2007 delivered a communications satellite to the country, which failed in the orbit 18 months after. The satellite was constructed with a loan of $200m and Federal Government counterpart funding of about the same amount.

Only last week, the Minister of State for Power, Mr. Darius Ishaku, had queried the competence and integrity of two Chinese firms handling the 3,500-megawatt Mambilla hydropower project and the 700MW Zungeru hydropower project.

The two projects being handled by SINO Hydro and China Gezhouba Group Company Limited are also being financed by loans from China Exim Bank.

In a telephone interview with one of our correspondents, the President, Campaign for Democracy, Mrs. Joe Odumakin, said there was a need to scrutinise the deals with the Chinese firms, otherwise nothing would come out of them.

“We don’t know what kind of deals they are making with them. It is our leaders that are selling us. The Chinese firms have not been delivering in the past. People do all sorts of things and get away with it,” she said.

A human rights lawyer, Mr. Imma Okochua, said Nigeria should be wary of deals with Chinese companies.

He said, “They come here and bribe our people and they do inferior jobs. They do inferior jobs even in their home countries. The only good jobs they do are when American and European countries hire them and insist on specifications.

“They have no value culture that we should emulate. They have nothing to offer other than corruption, which we already have. They have amassed cash and when they come here, they dangle it and our people sell their souls.”

The National Publicity Secretary, Congress for Progressive Change, Mr. Rotimi Fashakin, said China could provide a fertile ground if the state of mind of public officials was towards corruption.