China $3.58bn Loan: Nigeria May Lose All Assets – Expert Warns FG
Experts have warned the federal government that it must not risks losing key national assets to China in the event that it helps in paying back loans obtained from China which is currently put at $3.48bn.
The experts muttered against the backdrop of the possible takeover of Uganda’s only international airport and other key assets over the East African country’s inability to repay a $207m loan obtained on November 17, 2015 from the Export-Import Bank of China.
The loan has a maturity period of 20 years including a seven-year grace period. According to the deal signed with the Chinese lenders, Uganda will have to surrender its only international airport.
The Uganda Civil Aviation Authority said some provisions of the financing agreement with China exposed the Entebbe International Airport and other Ugandan assets which might be taken over by Chinese lenders upon arbitration in Beijing.
China has reportedly rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan.
This came as Nigeria’s Minister of Transportation, Rotimi Amaechi, in August 2020 hinted about the possibility of Nigeria forfeiting its assets to China in the event of loan default.
Amaechi reportedly said Nigeria had waived immunity on a loan, which means China could take the country to arbitration in the event of a default.
The minister, however, added that there would be no need for China to claim any infrastructure once Nigeria repaid its loans to the Asian country.
“We must learn to pay our debts and we are paying, and once you are paying, nobody will come and take any of your assets,” Amaechi said.
However, financial analysts hinted about the possibility of Nigeria forfeiting key national assets to China if the country defaulted on its $3.48bn loans.
They also advised the Federal Government to properly review the loan agreements with China to save the country from facing a situation similar to that of Uganda.
The Chief Executive Officer of SD&D Capital Management, Idakolo Gbolade, said Nigeria might forfeit certain assets in the event of a loan default.
Asked if Nigeria faced any risks on its China loans, Gbolade said, “Yes, it is very possible. If you remember about a year ago, there was serious concern in the National Assembly on the loans given by the Chinese Exim Bank to us, and I am sure the loan clause also includes forfeiture of national assets.”