Fakoyejo OlalekanThe Debt Management Office (DMO) has reacted to claims that Nigeria has been unable to meet its debt obligations to the Chinese government.
DMO said reports circulated that the Federal Government defaulted on loan repayment to China, which stood at $4.1 billion as of September 2021, according to the last update released by the debt office in December 2021.
The debt office stated Nigeria is committed to fulfilling its debt obligations in a timely manner and has not defaulted on any of its debt service obligations.
“Nigeria remains unwaveringly committed to fulfilling its debt obligations in a responsible and timely manner.
“The attention of the Debt Management Office (DMO) has been drawn to a publication by some media house claiming that Nigeria has defaulted in debt repayment to China which it claimed penalties stand at N41.21 billion,” the debt office said in a statement.
DMO told Nigerians to disregard the report as the country has not defaulted as claimed: “The Public is assured that Nigeria is fully committed to honoring its debt obligations and has not defaulted on any of its debt service obligations, the media report should therefore be disregarded.”
Prime Business Africa notes that China’s loans to Nigeria are tied to infrastructure, majorly railway and airport terminal construction.
The Chinese loans were used to construct the Abuja Light Rail Project, the Lagos-Ibadan railway section, and four airport terminal expansion projects in Abuja, Kano, Lagos, and Port Harcourt.
Also, the funds were disbursed for the Rehabilitation and Upgrading of Abuja-Keffi-Makurdi Road Project according to the debt office.
There have been fears that Nigeria might lose some infrastructure tied to the loan to China if the government defaults on repayment.
Recall that China fined Kenya N4.71 billion for defaulting on repayment of its loans, which were also provided for railway construction.
Kenya couldn’t meet its debt obligation to China due to the low revenue generated from the railway service.
Also, African Liberty reported in September 2018 that the Chinese government was in talks with Zambian government to take over the country’s national electricity company, ZESCO, due to its failure to meet debt obligation to the Asian nation.
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