Nigeria’s Debt to China Rises to $4.15 billion

The Debt Management Office (DMO) in its most recent disclosure has revealed that Nigeria’s debt to China is $4.15 billion as of September 2021.

This balance is out of a total debt of $6.5 billion accessible for Nigeria to draw down.

A large portion of the debts are from a time frame of twenty years going as far back as the Goodluck Jonathan era with over $2.7 billion drawn out of a total principal available of $3.1 billion. The balance of $1.3 billion was drawn down between April 2016 and December 2019 as Nigeria stepped up borrowings. Nigeria has a grace period of about seven years to reimburse the principal.

Just a $200 million debt had a time frame of twelve years with a grace period of five years. The loans are broken into dollar-based and Yuan based loans with $4 billion and another CNY480.

Nigeria’s debt to China has ascended in the course of the last decade as the government expands its debt portfolio towards less expensive Chinese loans with rates perked at an average of 2.5% per annum.

What Chinese loans are used for?

According to Nairametrics, the government, Chinese loans are project-tied loans. Some of these projects as at March 31, 2020, are

• Nigerian Railway Modernization Project (Idu-Kaduna section)
• Abuja Light Rail Project
• Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos and Port Harcourt)
• Nigerian Railway Modernization Project (Lagos-Ibadan section)
• Rehabilitation and upgrading of Abuja-Keffi- Makurdi Road Project