TUE, SEPT 04 2018-theG&BJournal- President Muhammadu Buhari has dismissed negative suggestions about Chinese aids and loans to Africa and Nigeria in particular saying that some of the debts are self-liquidating.
The President noted that Nigeria is ‘’fully able to repay all the loans as and when due, keeping with our policy of fiscal prudence and sound housekeeping.’’
‘’I am happy to note that Nigeria’s partnership with China through Forum on China-Africa Corporation (FOCAC) has resulted in the execution of critical infrastructure projects valued at more than $5 billion, over the last three years,’’ the President said while speaking at the ongoing FOCAC summit in Beijing.
He said that the vital infrastructure projects being funded (with loans) are perfectly in line with Nigeria’s Economic Recovery and Growth Plan.
The President noted that Nigeria is currently leveraging Chinese funding to execute $3.4 billion worth of projects at various stages of completion. He mentioned projects as the upgrading of airports, the Lagos-Kano rail line, the Zungeru hydroelectric power project and the fibre cables for internet infrastructure.
He noted that less than 3 months ago, Nigeria signed an agreement for an additional $1 billion loan from China for additional rolling stock for the newly constructed rail lines, as well as road and rehabilitation and water supply projects.
Meanwhile, China’s intention to be Africa’s biggest trade and investment partner was underscored by a whopping $60 billion aid, loans and investment announced by the Chinese President XI Jinping at the on-going Forum between senior Chinese officials and their African counterparts which kicked-off yesterday in Beijing China.
In announcing the package Jinping put forward 8 initiatives to strengthen ties with African continent. The initiatives include the import of more non-resource products from Africa, increased cooperative investment, more direct flights between China and Africa as well as an environmental cooperation center, an African studies institute security programmes to fight terrorism and sea pirates.
The aid package is the same size announced during December 2015 FOCAC summit in Johannesburg, South Africa, where Chinese President Xi Jinping also announced funding support for infrastructure development in Africa. Jinping also announced that 50 aid projects will be undertaken on development, ecological and environmental protection in Africa with a focus on climate change, preventing desertification, wildlife protection and marine cooperation.
Jinping said China and Africa have long formed a community with a shared future and will now turn it into a pacesetter for building such a community for humanity.
“Our goal is to make the world a place of peace and stability and life happier and more fulfilling for all,” Xi said
UN Secretary-General Antonio Guterres said China’s cooperation with Africa is fundamental for Africa’s success, which underpins the success of the world in development and peace. China and Africa are home to roughly 2.6 billion people, making up 35 percent of the world’s population.
Analysts have hailed the package as beneficial and with potential to increase landmark infrastructure in the continent. But some others are wary of the debt implications of continued Chinese aid and loans to African countries which they say could become unsustainable and destabilising.
Grant T. Harris, the CEO of Harris Africa Partners LLC published an article in the TIME where he suggested that Chinese debt ‘’has become the methamphetamines of infrastructure finance: highly addictive, readily available, and with long-term negative effects that far outweigh any temporary high.’’
‘’This is particularly true in sub-Saharan Africa, where China has become the largest provider of bilateral loans. Forty percent of sub-Saharan African countries are already at high risk of debt distress; by having so much debt concentrated in the hands of a single lender, they are dangerously beholden to their supplier,’’ he said.
A top Chinese official told Reuters Tuesday that China is helping Africa develop, not pile up debt. The response is viewed as a push back against criticism China is loading Africa with an unsustainable debt burden.
According to a CNN report, Scholars from the China-Africa Research Initiative (CARI) at Johns Hopkins University found that Chinese loans were not yet a major contributor to this debt distress for most nations.
‘’Zimbabwe, for example, still owes 77% of its national debt to the Paris Club. In Djibouti, however, China holds 77% of national debt, while Zambia’s $6.4 billion in Chinese loans represents the lion share of its commitments,’’ the report noted
Africa has borrowed about $130 billion from China since 2000, with loans generally used to finance infrastructure projects.
South Africa with $4.72 billion tops the list of African countries for Chinese foreign direct investment stock. Others on the top list includes Algeria with $2.53 billion, Nigeria-$2.38 billion, Zambia-$2.34 billion.
