Minister of Transportation, Rotimi Amaechi yesterday debunked claims that Nigeria has been ceded to China in exchange for loans.
The clarification was necessitated by the need to set records straight on the claim that the Nigerian government may have ceded the nation’s sovereignty to China in the event of a default in loan agreements signed with the Asian country.
Recall that the chairman, House of Representatives Committee on Treaties and Agreements, Ossai Nicholas Ossai, earlier claimed that there were clauses in the loan agreements signed between the Federal Republic of Nigeria (FGN) and the People’s Republic of China (PRC) that concedes Nigeria’s sovereignty to China.
The controversial clause in the agreement signed by Federal Ministry of Finance (borrower) on behalf of Nigeria and the Export-Import Bank of China (lender) on September 5, 2018, provides that, “The borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.”
However, Rotimi Amaechi clarified the misconception during a live programme on AIT, Friday. He denied the assertion that the loan amounts to giving Nigeria’s sovereignty to China.
He also pointed out that members of the National Assembly were aware of the $5.3billion loan and all the clauses currently under scrutiny by the transport committee, as the loan proposal was actually approved by them.
He said, “I have told the House of Reps; the clause is a simple one. For example, the loan to construct Ibadan to Kano rail is $5.3billion. The implication is that if by the end of the day you don’t pay back our money, whatever we need to take from you, we will take from you.
“But what the Chinese normally do is that they go after the same asset to recover their money. So what is wrong with that? You are asking for $5.3billion. The sovereignty you give to them is to allow them to take over a property in your country. It is not a personal thing but something of national interest.
“Now for me, if the National Assembly in their wisdom, going by the constitution, think that it is wrong, then they should tell us how to get the money to build these infrastructures because if the infrastructures were built before we came, we are not mad, we will go to something else.
“Remember that the Goodluck Jonathan’s government took some loans to do the Abuja-Kaduna rail service and the current administration decided to do the Lagos-Ibadan and now, we are seeking for the loan to link it to Kano so that we can have Lagos to Kano and move our containers.
“I have also told the National Assembly that there is nothing wrong with the investigation. It is part of their responsibilities but for now, they will jeopardize the ability of the government to raise money if we continue to ask questions that will make China raise an eyebrow and start wondering what is wrong.
DON’T MISS THIS – Don’t Probe Chinese Loans, Amaechi tells Reps
“This means that we may lose the loan for the Port Harcourt-Aba, Umuahia, Enugu, Markurdi, Gombe, Jos, Damaturu, then Maidugurri project. We will also lose the money you are asking for the Ibadan-Kano project which includes Ilorin, Minna and Kano.
“And then the loan for Lagos to Calabar being pursued with the Russians may also be lost and the areas covered include – Ore, Benin to Asaba, Onitsha, Warri, Uyo, Calabar. Do they want us to lose these loans because they are afraid of losing sovereignty? It is not ceding sovereignty in the technical sense of it, but giving them the power to cease their assets in other to recover their money, so there is nothing wrong with that.
“It’s a standard clause in every such agreement, whether it is the United States or the United Kingdom that we are signing it with because they want to know if they can recover their money.
Speaking further, Amaechi said “People are asking if Nigeria has the capacity to pay back the loans. We will pay back. A loan given for 20 years at 2 .8 per cent; which (other) country will give you that? I mentioned that these loans are paid directly to the contractors, once we sign that the job has been done. What is critical is that the projects are in place.
“Compared to the loans we got from the Western countries, this is at 2.8 per cent for 20 years with seven years moratorium. Why won’t we pay back?
On the mapped out plans for the repayment of the loans, the minister said the ministry of Finance handles part of that aspect as the job of the ministry of Transportation was to implement government policies.
He, however, noted that Nigeria was not defaulting on the payment plans yet, even as he urged successive governments to continue with the payment plans.
The minister explained: “We have already opened an escrow account to pay in the money. The minister of Finance sent me the account details for the NRC to start paying in the money.
“So if we are making #100 million and we are running with #90 million we can start paying #20-30 million monthly and before we know it, we can raise $1 million that we can send to the minister of Finance to pay as our contribution. The idea is to open an escrow account, remove the running cost and the profit can go into the loan repayment”.
Rotimi Amaechi said Nigeria had to resort to approaching China for loans due to the low-interest rate, the payback period and moratorium.
He said when compared to the terms of loans given by Western countries, it was clear the Chinese loans were better.
Follow this SpiceyGist on Instagram https://www.instagram.com/p/CDVwi3BHwbV/?utm_source=ig_web_copy_link