Why Nigeria wants to borrow another $1bn from China
In a bid to bankroll the Gurara II Hydropower project, the Federal Government of Nigeria has decided to borrow another loan from China to the tune of $1 billion.
The decision was reached, yesterday, during the Federal Executive Council meeting (FEC) held at the State House in Abuja.
According to President Muhammadu Buhari who led the session, the credit facility is to be provided by the China-Exim Bank. The new debt will further increase Nigeria’s escalating debt profile by N360 billion.
It could be recalled that the Debt Management Office disclosed in April that Nigeria’s total exposure as of December 2018 was N24.387 trillion. The figure was N21.7 trillion in the corresponding period in 2017.
While communicating the Federal Government’s position, the Minister of Water Resources, Suleiman Adamu, stated that the investment would generate 360 megawatts of power upon completion.
He said: “Council also approved N5.7 billion revised total estimated cost for the completion of Nkari dam in Akwa Ibom. Council also approved the appointment of a consultant to resuscitate the Gari irrigation project in Kano/Jigawa states. Council had in 2017 approved for the resumption of the project, which was earlier abandoned for 17 years.”
“The consultant is the same appointed in 1998. The contractors are already on the site. Council also approved the revised estimated total cost of n10.4 billion for the completion of Ile-Ife dam in Osun state. The project was started in 2014 and abandoned. The completion period is 24 months.”
Meanwhile, Babatunde Fashola, the Minister of Housing, Power, and Transportation, also mentioned that the sum of N11.208 billion was approved for the execution of projects under his ministry. One of these projects is the procurement of 200,217 metres by the Yola Electricity Distribution Company under the Meter Asset Providers Scheme.
“As you might know, Yola electricity Distribution Company is the disco that was surrendered by the original holder. So, it is under the Federal Government’s management. So, they are buying 200,217 metres for consumers under their franchise, which covers Adamawa, Borno, Taraba and Yobe states.
“The cost of those metres is n11.208bn. It is to be funded from the judgment sum that I previously briefed you about two years ago, that council approved a compromise from an old metre supply dispute since 2003.
“So, that money is in a bank; that is where these metres will be funded from and as consumers pay back the metres as they are supplied, the money goes back into that account”, Fashola said.
Furthermore, the Minister of Agriculture and Natural Resources, Chief Audu Ogbeh, while fielding questions from journalists, spoke about the approvals for the purchase of grains for storage.
“Everywhere in the world, silos are owned by the government into which they purchase grains at the end of harvest. The average is usually between two and three percent of all grains grown. In this case, we have got approval to buy 61,000 tons of maize, millet and sorghum and the purchasing will begin shortly.
“We also informed the council of the problem we have with Nigerian grains, especially maize, sesame seeds and groundnuts. An infestation called aflatoxin, which the Minister of Health confirmed, is a very big threat to the liver and the kidney of most consumers.
“Luckily, the International Institute of Tropical Agriculture has found a product which they produce in large quantities and send to Africa for treating the farms, the Silos and the sacks in which we put the grains to eliminate aflatoxin”, the minister told reporters.”
Mr. Ogbeh stated that the government still maintained its stance on domestically cultivated food for the populace, stressing that it has helped the government save about $21 billion on imports since 2015.