Fresh facts may have started to emerge on why the China-Exim Bank rejected the Federal Government’s $22.8bn loan request to build infrastructure.
A development economist, Dr. Umoren Dada in an interview said part of the possible reasons why China refused the latest loan request could be because of the size which is almost bigger than the Nigerian economy as it stands now.
According to him, “it would difficult for any bank to give out such a humongous loan to a developing economy where corruption is endemic.”
“The fact is that China’s fears cannot be unconnected with chances of the loan going down the drains and the possibility of inability to pay or even service.
However, due to the rejection, the House of Representatives has again, approved the request by the Federal Government to borrow $973,474,971.38 from China Development Bank. This followed the decision by the China-Exim Bank to reject Nigeria’s $22,798,446,773 loan request earlier approved by the National Assembly.
The Chairman of the House Committee on Rules and Business, Abubakar Fulata, moved a motion for the legislative chamber to amend its resolution granting approval for the failed loan deal. The motion was titled ‘Rescission of the 2016–2018 Federal Government External Borrowing (Rolling) Plan.’
Moving the motion, Fulata said, “The House notes that the 2016–2018 Federal Government External Borrowing (Rolling) Plan was approved by the Senate and the House of Representatives on March 5, 2020, and June 2, 2020, respectively. “The House recalls that the National Assembly approved the sum of $22,798,446,773 only under the 2016–2018 Medium Term External Borrowing (Rolling) plan. The House is aware of the communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna–Kano segment) occasioned by the COVID–19 pandemic, whereof China Exim Bank withdrew its support to finance the project.
