- China Entices Nigeria With Low-Interest Loans, Cheap Labour to Remain Nigeria’s Lender
Analysts have revealed that Nigeria is more indebted to China than any other country.
They also revealed that the attraction to China is due to favourable funding arrangement as well as cheap Labour of Chinese Contractors; in addition to the intervention of Exim Bank of China with its Concessionary or low-interest loans.
In fact, Chinese credit accounts for 80 per cent of all bilateral lending to Nigeria, according to an analysis by the Debt Management Office (DMO).
China provides loans for infrastructure development including; the building of railways, power plants, and airport. The support of the Chinese government may, in fact, be a smart move to secure contracts for Chinese firms to ensure it maintains a strong standing in Nigeria’s economy.
It has however been revealed that Chinese construction firms barely employ Nigerians during the project execution. They sometimes opt for casual workers popularly called ‘contract staff’.
Only recently, Nigeria signed a contract through its Galaxy Backbone Limited, with China’s Huawei Technologies for the country’s telecoms infrastructural development, based on a promised loan of $328 million by the Exim Bank of China.
The Director-General of the Nigeria Employers’ Consultative Association (NECA), Timothy Olawale, said that some agreements between the Federal Government and the Chinese government were not well planned with regards to technology transfer.
“The agreement is not favourable to the skill set of our people. We have engineers who are well qualified, better than those they are bringing in from China but they are out there roaming the streets.
“Granted that it is the Chinese government loan and they have the right to bring in their expertise too but the agreement should have taken into cognizance the development of our youths,” he said.
Vice President, Yemi Osinbanjo in a meeting with investors at the Council for Foreign Relations in New York, explained that Nigeria’s continuous patronage of China’s concessional loans was because of low interest of 1.5 per cent to 2 per cent.
Data from DMO also showed that as of March 2019, Nigeria’s total debt load stood at $81.274 billion. Nigeria owes China a total of $2.554 billion. Therefore Lending from China makes up 3 per cent of Nigeria’s debt load.