US Reveals Ways China Could Influence Nigerian Gov’t’s Decisions

The United States has disclosed that Nigeria could be influenced by China with the loans the Asian country has been extending to the West African nation.

In an Integrated Country Strategy report dated 6 April 2022, but updated on 23 June 2023 and obtained on Thursday, the US Department of State expressed concern over the Chinese credit and debt hanging over Nigeria. 

“China offers sub-prime financing for a range of infrastructure projects, with the potential to add unnecessarily to Nigeria’s debt burden and increase Chinese influence over the Nigerian government.” 

There have been reports of Nigeria falling into an alleged Chinese debt trap which could result in the country losing some of its infrastructure to the Asian country.

Nigeria’s last known Chinese debt was put at $4.1 billion as of September 2021 by the Debt Management Office (DMO). Note that the debt was $3.121 billion at the end of March 2020. 

The Chinese loans are tied to 15 infrastructural projects as of 30 September 2021, according to the DMO in a report titled ‘Status of Chinese loans’.

Some of the projects are; Nigerian Railway Modernization Project (Idu-Kaduna section), Abuja Light Rail Project, Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos and Port Harcourt), Nigerian Railway Modernization Project (Lagos-Ibadan section) and Rehabilitation and Upgrading of Abuja – Keffi- Makurdi Road Project. 

Amid claims that Nigeria could lose its infrastructure to China should the country default in its loan repayment, DMO in a state in 2020 had affirmed that: “Firstly, Nigeria explicitly provides for Debt Service on its External and Domestic Debt in its Annual Budgets. In effect, this means that Debt Service is recognised and payment is planned for. 

“In addition, a number of the projects being (and to be) financed by the Loans are either revenue generating or have the potential to generate revenue.” 

In April 2023, the DMO had also reiterated that Nigeria has been honouring its loan repayment, contrary to claims that the country has failed to service its Chinese debt, which was alleged to have accumulated to N110.31 billion in the last two years, with penalties reportedly standing at N41.31 billion. 

“The attention of the Debt Management Office (DMO) has been drawn to a publication by some media houses claiming that Nigeria has defaulted in debt repayment to China for which it claimed “penalties stand at N41.31 billion,” DMO said. 

The debt office further stated that: “The public is assured that Nigeria is fully committed to honouring its debt obligations and has not defaulted on any of its debt service obligations.”