China might refuse to give Nigeria $20bn loan

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Buhari and the Chinese president Xi Jinping in 2016

The Chinese government might refuse to approve a $20 billion concession loan earlier promised Nigeria.

According to The Guardian, a source in the Nigerian presidency has revealed that the FG was quite keen on getting the loan since the relationship between Nigeria and China, had improved.

There was therefore disappointment when signs appeared that the money might be withheld.The reasons given include the multiple negative growth recorded in the Nigerian economy in 2016.

Also it is a clear indication that their might be a loss of confidence in Nigeria’s credit worthiness by the global financial community.

source says: “We were very hopeful that we would secure that loan and other levels of assistance from the Chinese government.

“This is not to say we have given up though. We had set up an inter-ministerial committee working closely with the Chinese government officials as well as the China Exim Bank experts.

“They may have their reasons, but we are determined to fulfill our end of the bargain, and the Federal Government has already appropriated large sums for payment of counterpart funds on key projects to enable us to commence work proper.”

Last year, there was high hopes that the concession loan and other categories of financial assistance from China would be approved early, President Muhammadu Buhari led a delegation to Beijing in April last year to make a strong case for the country.

However, economic experts who visited Nigeria for physical assessment advised the Chinese government to exercise caution, citing the shrinking economy and falling value of the naira.

These experts also spoke of the high risks in perting the loan to projects not specified in the agreement and requested a direct monitoring of the projects, in addition to the need for full compilation of all current trade agreements between the two countries till date.

The team of experts, who were from China Exim Bank had also expressed fear of possible mismanagement of the funds and requested an overhaul of some of the priority areas presented by the Federal Government for closer study on their viability and sustainability.

Despite all this, a ministry official, who reportedly sent a text message to The Guardian, said: “All appropriate loan prospecting options by the federal ministry of finance are on course, and are undergoing normal process of negotiation.”

Meanwhile, the Emir of Kano, Muhammadu Sanusi has blamed the Nigerian government for the current economic situation.

Sanusi who served as the governor of the Central Bank of Nigeria (CBN), during the administration of Goodluck Jonathan said this during the15th meeting of the joint planning board and national council on development planning.

Watch a video from 2016 on the loan from China: