Rotimi Amaechi, the Minister of Transportation, explaining that the Sovereign Guarantee clause in the loan agreement was not in any way ceding the sovereignty of Nigeria to China but to assure China that it can take over the asset constructed with the loan, should Nigeria default.
Amaechi, while speaking on a television programme yesterday, said: “The terms contained in the agreement is not as if we are signing off the country’s sovereignty. What we do is that we give a sovereign guarantee, which is an immunity clause. The clause is that in case the country defaults, China will come to collect the items agreed upon.”
The minister assured that the Chinese would not take over assets that were not constructed with the money, in case of default. And should the asset depreciate; then the country can discuss other assets they can take over to recoup the loans.
He disclosed that the Federal Government is seeking the National Assembly’s approval for $22.5b loan from China for railway modernization. A breakdown shows that Federal Government is seeking $5.3b for the construction of Ibadan-Kano railway line, $3b for Port Harcourt to Maiduguri, $11.1b for Lagos-Calabar and $3.5b for Abuja to Itakpe.
He noted that the interest rate on the loan is about 2.8 percent, spanning a period of 20 years and has seven-year moratorium, saying with such terms, it is impossible the country will not be able to pay back within that period.
He disclosed that the Federal Government has started paying back $36m out of the $500m loan collected by the Goodluck Jonathan administration for the construction of Abuja-Kaduna standard gauge railway.
On why he is asking the National Assembly to stop probing the loan, Amaechi said: “If you frighten the Chinese that they won’t recoup the loan, they will pull back. They want us to show them evidence that we will pay back, and one of the evidences is that waive backs the immunity clause, so that they can take their asset. It is the immunity clause that is being debated.”
Meanwhile, the Human Rights Writers Association of Nigeria (HURIWA) has given the Federal Government 72 hour-ultimatum to pull away “from the toxic and enslaving loan agreement with China, which threatens our sovereignty.”
It said failure to pull out of the agreement would prompt mobilization of all CSOs in the country to challenge this new form of economic colonialism foisted by China and signed by the President Muhammadu Buhari-led administration in a competent court of law.
According to the Rights group, the history of Chinese loans, especially in Africa, has become a growing concern, as several observers, including the United States representatives, have warned many nations on what they described as Chinese debt-trap diplomacy, as the Asian nation allegedly used finance as a weapon in many developing countries.
In a statement signed by the National Coordinator, Emmanuel Onwubiko and the National Media Affairs Director, Zainab Yusuf, HURIWA argued that since all Chinese loans are tied to infrastructural developments, some African nations have had to forfeit their stakes in the infrastructure, which they used as collateral, after they defaulted.
Source: Guardian
