National Assets Not Used As Collateral For Chinese Loans – DMO

The Debt Management Office (DMO) has disclosed no national asset was used as collateral for the solicitation of loans from China.

Patience Oniha, director-general of DMO, mad this known during an interview with NAN on Saturday.

Lately, many have expressed fears about some African countries, including Nigeria, facing the threat of losing critical national assets to the Asian country owing to high-level indebtedness.

Reacting to the reports, Oniha said: “Nigeria’s total debt stock as at Sept. 30 was 37.9 billion dollars, this figure comprised the external debt stock of the Federal Government, 36 state governments and the Federal Capital Territory,”

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“But total loans from China stands at 3.59 billion dollars, which is 9.47 per cent of the total external debt. The loans did not require any national asset as collateral; they were largely concessional.”

“Before any foreign loan is contracted, including the issuance of Eurobond, they are approved by the Federal Executive Council and thereafter, the National Assembly,”

“An important and extremely critical step is that the loan agreements are approved by the Federal Ministry of Justice.

“An opinion is issued by the Attorney-General of the Federation and Minister of Justice before the agreements are signed.

“Several measures which operate seamlessly have been put in place to ensure that data on debt are available and that debt is serviced as at when due. Provisions are made explicitly for debt service in the annual budgets.”

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“The first action is that the parties should resolve it within themselves and if that fails, they go to arbitration,”

“In other words, a lender, in this case, China, would not just pounce on an asset at the first sign of a dispute, including defaults.’’