Time to rethink numerous Chinese banks’ infrastructure funding in Nigeria —BHIU
Investigations by Business Hilights Intelligence Unit (BHIU), the research arm of Business Hilights publications group, have shown that since the creation of Nigeria, the current administration remains the highest in sourcing infrastructure funding from China.
However, the question remains what is the attractive force of China in dolling out these facilities and also what does China stand to gain on both the short and long run as an economy?
An abridged account of the entire infrastructure funding from China since May 2019 to date stands roughly at well over $30bn which otherwise is treated as foreign debt in real sense of it.
Currently, China is funding virtually all the railway schemes going on across the country; Chinese bank, especially the China Export-Import Bank is bank-rolling the largest power scheme in Africa, known as Mambila Power project; China is also funding some road projects, housing schemes, deep seaport development projects and many others.
Though the federal government had continued to defend the Chinese loan glut to its flexible terms and conditions and more especially, their very cheap interest rate and long nature of the repayment tenure otherwise, many Nigerians and public finance experts are divided on the generation that will face the herculean task of repayment when the current administration leaves office and the chances that these infrastructures being delivered fail to be completed on record time and mainly during the life of this administration.
Analysts fear if the federal government will continue to muster the courage to continue to check influx of sub-standard products form China when the bulk of funding for several; if not all, critical infrastructures all come from the same economy.
Only on Monday, the Minister of Finance, Mrs. Kemi Adeosun, met with a delegation from the China Development Bank (CDB) to discuss areas where the lender could be of assistance to the country.
The meeting, which was held at the headquarters of the finance ministry, was attended by the Permanent Secretary at the ministry, Mahmoud Dutse, and top officials of the China Development Bank led by its Vice Chairman/President, Zheng Zhijie.
During the meeting, Zhijie explained that the meeting was a follow up to the visit of President Muhammadu Buhari to China in April 2016, where an understanding was reached to deepen the level of bilateral relationship between both countries.
According to him,
He said since then, the level of trade relationship between China and Nigeria had been on the increase, adding that the visit of the bank’s officials was part of measures to deepen the relationship.
Addressing the Chinese delegation, Adeosun, said the Federal Government was working hard to reposition the economy by addressing the infrastructure gap, stressing that CDB remains an important partner to galvanise the needed funds for Nigeria in key sectors of the economy such as power, rail and roads.
The Minister averred that “With a huge balance sheet size, the China Development Bank had the needed funding to finance any project”.
“China Development Bank is a very important bank with a large balance sheet and a track record in funding major projects and we are very excited to have you here. We are repositioning the Nigerian economy and we are opening up opportunities in a number of areas such as power, infrastructure, agriculture and exports.
“We want to grow the economy and create jobs for our people, and of course, that means capital. We have a very good relationship with China and we have very strong commitment from China at the highest level of your support.
“What we hope we will be doing are the specifics of how to get the China Development Bank to actively close some of the transactions that you are looking at and we are interested in partnering with you,” Adeosun noted.