FG $22bn loan request rejected by Chinese bank – Reps
On Tuesday, the House of Representatives approved the Federal Government’s request to borrow $973,474,971.38 from China Development Bank.
This followed the China-Exim Bank’s decision to reject Nigeria’s loan request for $22,798,446,773, which was previously approved by the National Assembly.
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Abubakar Fulata, chairman of the House Committee on Rules and Business, moved that the chamber amend its resolution granting approval for the failed loan transaction.
The title of the motion was “Revocation of the Federal Government’s External Borrowing (Rolling) Plan for 2016–2018.”
Fulata, who moved the motion, stated, “The House recognises that the 2016–2018 Federal Government External Borrowing (Rolling) Plan was approved by the Senate on March 5, 2020, and by the House on June 2, 2020.
“The House recalls that the National Assembly only approved $22,798,446,773 in Medium Term External Borrowing (Rolling) for 2016–2018.
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) due to the COVID–19 pandemic, as a result of which China Exim Bank withdrew its support for financing the project.
He added, “The House is also aware that the contractor (CCECC Nigeria Limited), in collaboration with the Federal Ministry of Transportation, engaged China Development Bank as the project’s new financier in the amount of $973,474,971.38.”
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Therefore, Fulata pleaded with the House to “rescind its decision regarding the financier and harmonised terms and approve the change of financier from China Exim Bank to China Development Bank.”
The legislative body unanimously granted the petition.
In addition, the House approved the terms outlined in the harmonised term sheet: Segment – Kaduna–Zaria–Kano; lender – China Development Bank; loan type – commercial loan; maturity – 15 years; currency – euro; interest rate – 2.7% plus 6-month Euribor; commitment fee – 0.4%; and upfront fee – 0.5%.
Nicholas Ossai, chairman of the House Committee on Treaties, Protocols, and Agreements, stated that the Executive branch of government failed to provide the National Assembly with information regarding Nigeria’s commercial agreements with other nations.
Ossai continued, “Secondly, we are transitioning from China Exim Bank to China Development Bank, which necessitates the addition of a new agreement. And if this resolution is passed, it means that members of the House will not be able to view these agreements.
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