Wike, Others In Trouble Over Chinese Loans
The Socio-Economic Rights and Accountability Project (SERAP) has urged Nigeria’s 36 state governors and the Minister of the Federal Capital Territory, Abuja, Mr Nyesom Wike to disclose the details of loans taken and other liabilities.
The organisation urged the governors and FCT minister to “disclose details of any Chinese loans, liabilities, and other external borrowing obtained, and guaranteed by the Federal Government as well the terms and conditions for any such borrowing including the provisions on collateral.”
SERAP urged them to “provide details of the repayment obligations regarding any Chinese loans, liabilities and other external borrowing obtained and guaranteed by the Federal Government, the interest rates on the loans, and any defaults, debt restructurings, and debt exposure to China and other creditors.”
SERAP also urged them to “clarify any investment agreements with Chinese companies and repayment histories of any loans, liabilities and facilities obtained from China and other external creditors and guaranteed by the Federal Government.”
In the letters dated 24 August 2024 and signed by SERAP deputy director Kolawole Oluwadare, the organisation said: “We are concerned that your state and the FCT may have failed to efficiently manage your debt obligations, especially your external debt and investment obligations, as guaranteed by the Federal Government.
“The failure to uphold your obligations is contrary to Section 6 of the Debt Management Office Establishment (etc.), Act, and creates financial risks and other exposure to Nigeria with respect to these Chinese loans, liabilities and other external borrowing.
“These Chinese loans, liabilities and other external borrowing by your state and the FCT may not have been used for the purposes for which they have been obtained and terms and conditions guaranteed by the Federal Government.”
The letters read in part: “SERAP is concerned that there is a significant risk of defaults of the Chinese loans, liabilities, and other external borrowing by your state and the FCT, which are guaranteed by the Federal Government.
“There are also significant risks of confiscation of Nigerian assets in foreign jurisdictions by multilateral and bilateral agencies and other creditors in cases of failure by your state and the FCT to satisfactorily observe and fulfil the terms and conditions of the Chinese loans, liabilities and other external borrowing which are guaranteed by the Federal Government.”
“We would be grateful if the recommended measures are taken within 7 days of the receipt and/or publication of this letter.
If we have not heard from you by then, SERAP shall consider appropriate legal actions to compel your government and the FCT to comply with our request in the public interest,” it said.
SERAP noted that a recent report by the National Bureau of Statistics (NBS) revealed that over 133 million Nigerians are living in different categories of poverty, the majority of them women and children.
It expressed concern about alleged mismanagement of public funds by state governors and the FCT authorities.
It said, “We urge you to disclose the spending details of these Chinese loans, investment obligations and external borrowing, including details of and locations of projects as well as the implementation status and completion reports, if any, on the projects.
“According to Nigeria’s Debt Management Office, the total external debt for Ogun State is N168,833,006.66 as at December 31, 2023. The total public debt portfolio for the country’s 36 states and the Federal Capital Territory is N9.17 trillion.
“Nigeria’s total public debt stock, including external and domestic debts, increased by ₦24.33 trillion in three months alone, from ₦97.34 trillion ($108.23 billion) in December 2023 to ₦121.67 trillion ($91.46 billion) as of March 31, 2024. The debt represents external and domestic loans obtained by the Federal Government, the 36 state governments and the FCT.
“SERAP notes that the World Bank has approved several loans and other funding facilities to the country’s 36 states including the recent $750 million credit line meant to the states to carry out reforms to attract investment and create jobs.
“The World Bank on 15 December 2020 approved a $1.5 billion loan for Nigeria’s 36 states and the FCT for social protection and strengthened state-level COVID-19 response. The loan aims to help the states build a resilient recovery post-COVID19 and to reduce poverty.”
