Chinese bank declines FG’s $22.8bn loan request

A Chinese bank, China-Exim Bank, has declined an agreement to grant Nigeria’s federal government (FG) a loan of $22,798,446,773 earlier approved by the National Assembly.

This was revealed House of Representatives Committee on Rules and Business on Tuesday.

The Committee has however approved the Federal Government’s request to borrow $973,474,971.38 from another Chinese bank, China Development Bank.

Chairman of the Committee, Abubakar Fulata, moved a motion for the legislative chamber to amend its resolution granting approval to the failed commercial deal.

The motion was titled ‘Rescission of the 2016–2018 Federal Government External Borrowing (Rolling) Plan.’

Moving the motion, Fulata said, “The House notes that the 2016–2018 Federal Government External Borrowing (Rolling) Plan was approved by the Senate and the House of Representatives on March 5, 2020, and June 2, 2020, respectively.

“The House recalls that the National Assembly approved the sum of $22,798,446,773 only under the 2016–2018 Medium Term External Borrowing (Rolling) plan.

The House is aware of the communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna–Kano segment) occasioned by the COVID–19 pandemic, whereof China Exim Bank withdrew its support to finance the project.”

He added, “The House is also aware that to secure funds for the project, the contractor (CCECC Nigeria Limited), in collaboration with the Federal Ministry of Transportation, engaged China Development Bank as the new financier in the sum of $973,474,971.38 only.”

Fulata, in the circumstance, 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.