Amaechi – China Loan: Nigeria Will Pay Back In 20 Years

Amaechi – China Loan: Nigeria Will Pay Back In 20 Years

Minister of Transportation, Rotimi Amaechi, has said the Federal Government has the capability to pay back loans collected for the construction of rail projects within the stipulated period of 20 years.

This comes after the House of Representatives raised an alarm over clauses conceding Nigeria‘s sovereignty to China in a 2018 loan agreement.

The clause described as “lethal” is in article 8(1) of the commercial loan agreement between Nigeria and Export-Import Bank of China.

According to a report by ThisDay, the controversial clause in the agreement reads;

The borrower (Nigeria) hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.

Reacting to this, Amaechi, in a statement on Saturday, noted that China is the only country giving out loans with a low-interest rate of 2.8 per cent.

He expressed that no country in the world would give out a loan without a guarantee to pay back such loans.

Amaechi stressed;

The trade agreement between Nigeria and China, the ministry of transportation does not take loan, everything about loan is directed to the Ministry of Finance, so, I couldn’t have signed any loan because I don’t take loan.

What I signed is what is called commercial contract, which is contract between the Federal Government and CCECC as a contractor, the contract between Nigeria and China is usually signed by the ministry of finance.

He added;

Whether is the ministry of finance that signed it or the ministry of transportation, the issue is that nobody will give you loan free of charge. There must be an agreement and such agreement must contain some terms, that doesn’t mean that you are signing away the sovereignty of the country, no country will sign out its sovereignty.

What clause 8 says is, I expect you to pay according to those terms we have agreed, if you don’t pay, don’t throw your immunity on me when I come to collect back the guarantee that was put forward, that is all.

The minister noted;

We are paying the loans. In the same National Assembly sitting, they were told that of the 500million dollars loan, we have paid 96 million dollars already, Nigeria is already paying. And the 500 million dollars was not taken by us, it was taken by President Goodluck Jonathan in his term and that clause was there.

He expressed that;

Nigeria has the capacity to pay back for the period of 20 years at 2.8 per cent, which country will give you that loan? Secondly, these loans are not given to us, they are paid directly to the contractors. Once they sign that the job has been done, they pay the contractors and that has never happened before and this project are in place. Are they trying to rubbish the fact that there is a railway from Abuja-Kaduna? There is no loan in Nigeria, either internal or external that is not approved by the National Assembly, none.

Amaechi explained;

Chinese government will not even give you a loan without an approval by the National Assembly because if they give you a loan without the approval from NASS that is no loan.

The minister further said the government needed the loans to boost infrastructure in the country.

According to him, the sovereign guarantee and sovereign immunity clause raised by the NASS is a term used to ensure that loans collected are paid back.

However, members of House of Reps said that Amaechi should return to the committee on August 17 with other ministers to give details of the contract agreements.

The House also summoned the Minister of Communication, Ali Isa Pantami; Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed; and Director General of the Debt Management Office, Ms Patience Oniha.