The Minister of Transportation, Rotimi Amaechi, says the Nigerian government has the capability to pay back loans collected for the construction of rail projects within the stipulated period of 20 years.
Amaechi, in a statement on Saturday, said China was the only country giving out loans with a low-interest rate of 2.8 per cent.
He said no country in the world would give out a loan without a guarantee to pay back such loans.
The trade agreement between Nigeria and China, the ministry of transportation does not take loan, everything about loan is directed to the Ministry of Finance, so, I couldnt have signed any loan because I dont take loan.
What I signed is what is called commercial contract, which is contract between the Federal Government and CCECC as a contractor, the contract between Nigeria and China is usually signed by the ministry of finance.
Whether is the ministry of finance that signed it or the ministry of transportation, the issue is that nobody will give you loan free of charge.
There must be an agreement and such agreement must contain some terms, that doesnt mean that you are signing away the sovereignty of the country, no country will sign out its sovereignty.
What clause 8 says is, I expect you to pay according to those terms we have agreed, if you dont pay, dont throw your immunity on me when I come to collect back the guarantee that was put forward, that is all.
In 2017, the Nigerian government secured a $7.5 billion loan from the Chinese for the Lagos-Kano rail project. Another $1.5 billion loan was received from China for the Lagos-Ibadan rail construction. Earlier this year, the Senate approved a $22.7 billion loan request by President Muhammadu Buhari: 70 per cent of the loan (about $17 billion) will be sourced from Chinas EXIM Bank.
Amaechi said Nigeria is already re-paying some of the loans it had taken, noting that out of a $500 million loan taken by the previous administration, the country had paid back $96 million.
And the $500 million was not taken by us, it was taken by President Goodluck Jonathan in his term and that clause was there.
Nigeria has the capacity to pay back for the period of 20 years at 2.8 per cent, which country will give you that loan? Secondly, these loans are not given to us, they are paid directly to the contractors.
Once they sign that the job has been done, they pay the contractors and that has never happened before and this project are in place. Are they trying to rubbish the fact that there is a railway from Abuja-Kaduna?
There is no loan in Nigeria, either internal or external that is not approved by the National Assembly, none.
Chinese government will not even give you a loan without an approval by the National Assembly because if they give you a loan without the approval from NASS that is no loan, Amaechi explained.
The minister further said the government needed the loans to boost infrastructure in the country.
According to him, the sovereign guarantee and sovereign immunity clause raised by the NASS is a term used to ensure that loans collected are paid back.
The minister said in the case of a default, only the assets constructed with such a loan would be taken back.
He said: What you do is you give a sovereign guarantee and that guarantee is the immunity clause they are talking about.
When we say, I give you a sovereign guarantee and we get immunity clause, the immunity clause is that, if tomorrow I am not able to pay and you come to collect the items we have agreed upon, that these are the items that am putting down as guarantee, I can waive my immunity and say no you cant touch it am sovereign country.
So, they are saying, if you are not able to pay, dont stop us from taking back those items that will make us recover our funds. So, is China our father that will give us money for free?
It is a standard clause in every agreement whether is America we signed it with, whether is Britain, any country would want to know that they can recover their money.
Anybody that is saying he doesnt know what a sovereign guarantee or immunity is, too bad for the person, because it simply means in trade that I am not giving you this loan free of charge.
Just like you go to the bank to collect a loan, the moment you dont pay they go after your assets you put down, that is all about the clause, the Chinese can never come and take over Aso rock and become President or Minister.
And if the assets you put down become depreciated then you negotiate which assets they can go after. Chinese will never take over what was not constructed with the loan.
Amaechi noted that it would be unconstitutional to take a loan not approved by the NASS, but for confidentiality in government, he would have published the clauses generating the dusts.
The minister while asking the reason for the investigation by the NASS added that they were aware of all the loans.
He said: The Chinese is just asking us to show them the evidence that we will pay back, which is the immunity clause. If we dont pay, they can take back their assets.
On the Zambia experience, where the country could not meet up with its loan agreement, the minister said that the Chinese government will never take over infrastructure that was not constructed from the money taken.
He also acknowledged that the finance ministry in a payment plan had started paying back some of the loans collected.
He said the payment plan was the responsibility of the ministry of finance, and the Ministry of transportation was supposed to implement the contract.
They are meeting the requirements, at any point in time that we need to pay, well pay. $1.6 billion was taken to fix Lagos to Ibadan, we are asking for $5.3 billion to fix from Ibadan to Kano.
$3.2 billion to fix Port Harcourt to Maiduguri, then Lagos to Calabar which is about $11.1billion, if those things were done when we had money, the infrastructure will be here today? The answer is no, Amaechi added.
The minister, however, called on the National Assembly and Nigerians to appreciate government effort in providing infrastructure in the country.
Mr Amaechi noted that the Itakpe /Warri rail project in the South-South, which was abandoned for 34 years by successive governments was fully rehabilitated by the present administration without seeking for loan.
Buhari, APC owe Nigerians apology – Atiku
Meanwhile, former Vice President and the presidential candidate of the Peoples Democratic Party (PDP) in the 2019 general election, Atiku Abubakar, Sunday said that the President Mohammadu Buhari led government and the All Progressives Congress (APC) must apologise to Nigerians and make an admittance of guilt for taking the country through the throes of subjugation to another country.
A statement by his media office, said that two months ago Atiku Abubakar called the attention of the country to the reality of reckless borrowing by the APC administration and how the terms of those loans could compromise the future of the country.
Lamenting that some managers of the party and even the government denied the allegations that he raised and also discounted the warning for caution, Atiku said regrettably, just last week, a cabinet minister confirmed our fears. Now, we all are aware that Nigerias sovereignty may have been traded for foreign loans and God forbids our inability to service those loans, the lender country would take ownership of choice infrastructure on the Nigerian soil. No negotiation could be weaker than that!
Nigeria had a total foreign debt stock of $7.02 billion on May 29, 2015. Today, our foreign debt is $23 billion and rapidly rising. Debt, by itself, is not a bad thing. But debt budgeted for such unproductive ventures, like the proposed $500 million upgrade of the Nigerian Television Authority and other sundry bogus contracts, is debt that leads to death. To trade Nigerias sovereignty for this type of profligacy is the height of irresponsibility!, Atiku said.
The former vice president said that he had advocated for a more robust engagement of the private sector and promotion of foreign direct investment as sustainable alternatives through which government could fund infrastructure development. But on the contrary, he said, the Nigerian government under the banner of the All Progressives Congress threaded the direction of looking for cheap foreign loans in exchange for the sovereignty of Nigeria.
Atiku recalled that former President Olusegun Obasanjos administration initiated a National Privatization Programme with the sole objective of ensuring that the private sector took some measure of influence in social investment portfolio and, in some instances, provided funding for infrastructure development.
He said that there was nothing in that plan that traded Nigerias sovereignty for some cheap loans which, in the light of unfolding revelations of sleaze in some departments of government, would have ended in private pockets.
He therefore said the government and the APC must apologize to Nigerians and make an admittance of guilt for taking the country through the throes of subjugation to another country.
