US worries China’s loans bolster influence in Nigeria
Nigeria's future at stake US worried by China's loan impact Cites subprime loans
US worries China’s loans bolster influence in Nigeria
The United States has raised concerns regarding China’s growing influence in Nigeria’s economy and politics through the provision of subprime loans for various infrastructure projects.
According to the US Department of State’s Integrated Country Strategies document, which was obtained by The PUNCH, these loans from China could potentially increase Nigeria’s debt burden and give China greater leverage over the Nigerian government.
The document, initially approved on April 6, 2022, and subsequently reviewed on June 23, 2023, highlights that China has been offering subprime financing for a range of projects such as railways, roads, power plants, and airports in Nigeria.
Subprime loans, which carry higher interest rates and are often given to borrowers with lower credit ratings or income, are becoming a concern due to their potential impact on Nigeria’s financial stability.
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The PUNCH reported that as of March 2023, Nigeria owed the Exim Bank of China a total of $4.34 billion. This bank is a significant source of financing for Chinese companies involved in various infrastructure ventures within Nigeria.
In January 2022, it was also revealed that the Chinese Civil Engineering Construction Corporation (CCECC) dominated railway projects in Nigeria worth over $25.51 billion, supported by Chinese financing.
In addition to these concerns, the US Integrated Country Strategies document criticized Nigeria’s political and economic systems, noting that they are often driven by patronage and personal interests rather than a focus on national stability and unity.
The document suggested that Nigeria’s decision-making process lacked coordination between relevant ministries and pointed out the influence of short-term personal interests on policy decisions.
To address these issues, the United States recommended that Nigeria adopt more transparent and accountable governance practices.
Additionally, diversifying the economy and improving human capital development were highlighted as important steps. The US also expressed its commitment to supporting Nigeria’s efforts to combat terrorism, corruption, and poverty.