The United States of America has accused China of influencing Nigeria with loans.
Daily Report Nigeria reports that the allegation was made in an Integrated Country Strategies document by the US Department of State.
The PUNCH reports that the document which was initially approved on April 6, 2022, was reviewed and subsequently updated on June 23, 2023.
The document alleged that China offered sub-prime financing for various infrastructure projects in the country.
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The document read in part, “Meanwhile, China offers sub-prime financing for a range of infrastructure projects, with the potential to add unnecessarily to Nigeria’s debt burden and increase Chinese influence over the Nigerian government.”
Subprime loan is described by the Corporate Finance Institute as a loan offered to individuals at an interest rate above prime, who do not qualify for conventional loans.
The document also faulted the political and economic system in Nigeria, saying;
“Nigeria’s fundamental problem is patronage-based political and economic decision making, with little to no coordination between relevant ministries, and a disempowered civil service that does not sufficiently advise the Federal Government or sustain policy objectives over multiple administrations.
“Political and economic elites lobby for policy decisions that favour their short-term personal interests rather than the longer-term stability and unity of the state.”
As of March 2023, Nigeria owes the Exim Bank of China $4.34bn.
