FOCAC: FG cautioned against mounting debts to China
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The Federal Government has been warned against the increasing debts Nigeria currently owes the People’s Republic of China, following a series of loans the Chinese have offered to Nigeria to improve its infrastructure. Nigeria debts to China is said to be 8.5 percent of the entire external debt the country owes.
The Senate Committee Chairman on Foreign and Domestic Debts, Shehu Sani said this while chairing a round table dialogue organized by the Centre For China Studies (CCS) to review the recently held Beijing summit of Forum of China Africa Cooperation (FOCAC) in Thursday in Abuja.
Sani, who is also the Deputy Chairman, Senate Committee on Foreign Affairs, expressed fear that the current creditor-debtor relationship between Nigeria and China may boomerang for Nigeria if other areas of cooperation are not explored.
Speaking on the theme “The Outcomes of the 2018 Beijing Summit of FOCAC and how it can be synergized with Economic Recovery and Growth Plan to drive sustainable and inclusive development,” Senator Sani noted that although China’s support in development efforts of Africa is commendable, there is need to be wary of the effects of piling debts, to avoid a servant-master relationship.
Sani said “China-Africa relations should not be simply about loans, we must be careful,there is strong emphasis on loan”
“Loan is sweet but payment is bitter, and it will be in the interest of both countries that other areas should be explored”
“Debt from our experience is a new form of colonialism, and it is my opinion that if you borrow in bits, it will soon become a mountain in payment that you cannot pay” he added.
“So we should explore other areas, from security cooperation, to China doing all it can to ensure Nigeria has a permanent representation at the UN Security Council”
The senator charged African leaders to be inspired by the success story of China,by looking inwards and identifying potentials key to positioning the continent in the right direction.
In his remarks the Charge d’ Affaires of Chinese embassy in Nigeria, Lin Jing said Nigeria debt’s to China is 8.5 percent of the entire external debt the country owes, while assuring that the relationship between Nigeria and his country is a give and take situation.
“China has never been a Father Christmas to Africa, sometimes we need to give first and take later, sometimes we give more and take less, other times we give and don’t take at all”
He however encouraged African countries in the FOCAC system to be doers instead of onlookers.
The Director of Centre for China Studies, Charles Onuniaju, said that Nigeria must take advantage of the cooperation to solve its infrastructure deficit. He noted that there was nothing inherently wrong in securing loans stressing that China at a point in its history also resorted to taking loans but invested in productive and profitable projects that eventually transformed the country into a big economy and the second biggest in the world.
The CCS Director advised the Nigerian government to have an effective and efficient inter-agency framework and strategy to leverage on the opportunity being offered by China.
During the two-day FOCAC summit in Beijing between September 3 and 4, Chinese President Xi Jinping, announced an additional $60 billion support funds to Africa as a follow up to the $60 billion offered to Africa during 2015 FOCAC summit in Johannesburg, South Africa.
President Muhammadu Buhari, who addressed the Summit, had said that Nigeria’s partnership with China through FOCAC has resulted in the execution of vital infrastructural projects across the country, valued at over $5 billion in the last three years of his administration.
President Buhari stressed that through the Chinese support, Nigeria had impressively addressed significant challenges in the areas of infrastructure, human capacity development, power, transport, agriculture and humanitarian assistance.
“For Nigeria, our partnership with China through the FOCAC platform, has resulted in the construction of the first urban rail system in West Africa. This $500 million project in Abuja was commissioned in July this year,” the President said in the statement issued by his aide Garba Shehu.
Charles Onunaiju had told BusinessDay in a chat that “Out of the 60 billion dollars funding 35% is concessional loan, which must be repaid with long period of repayment with low interest rate, it is not free. “So what is important in the FOCAC process is to design bankable projects especially key infrastructure that should be commercially viable and market based, which means it can repay itself within a space of time though with low interest rate. The Chinese don’t offer free lunch,” he said.
He stressed that Nigeria can do better than accessing $5billion which she did in the last FOCAC in Johannesburg. “I think with our engagement in the Belt and Roads we can access more Chinese liquidity that is embedded in several financial mechanisms like the Silk Road Fund, the Asia Investment and Infrastructure Bank (AIIB), the New Development Bank of the Brics countries that is being hosted by in China,” he said.
Innocent Odoh, Abuja