The China-Exim Bank has rejected Nigeria’s loan request of N10.12 trillion ($22,798,446,773) that was earlier approved by the National Assembly.
The loan was intended to fund the Nigerian Railway Modernisation Project’s Kaduna-Kano segment. However, due to concerns about Nigeria’s ability to repay the loan and the impact of the COVID-19 pandemic on the project, China Exim Bank withdrew its support.
In response, the House of Representatives has approved the request by the Federal Government to borrow $973,474,971.38 from China Development Bank. The loan will fund the Kaduna-Zaria-Kano segment of the railway project, and the loan terms include a 15-year maturity, a 2.7% interest rate plus 6 months Euribor, a commitment fee of 0.4%, and an upfront fee of 0.5%.
During the House of Representatives’ plenary on Tuesday, March 28, 2023, the Chairman of the House Committee on Rules and Business, Abubakar Fulata, moved a motion for the legislative chamber to amend its resolution granting approval for the failed loan deal. The motion was titled ‘Rescission of the 2016-2018 Federal Government External Borrowing (Rolling) Plan.’
Fulata prayed the House to “rescind its decision on the financier and harmonised terms and approve the change of financier from China Exim Bank to China Development Bank.” The lawmakers unanimously granted the prayer.
However, the Chairman of the House Committee on Treaties, Protocols and Agreements, Nicholas Ossai, commented that the Executive arm of the government failed to present details of Nigeria’s commercial agreements with other countries to the National Assembly.
He insisted that it was an external loan with an international commercial agreement, which falls under the jurisdiction of his committee.
The Speaker of the House, Femi Gbajabiamila, argued that the substantive committees, especially the Committee on Transport, had gone through the details. The motion was eventually passed, and the loan from China Development Bank was approved.