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HomeBusinessNigeria not defaulting on loan repayment to China, says DMO

Nigeria not defaulting on loan repayment to China, says DMO

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The Debt Management Office (DMO) has debunked the claim that Nigeria has defaulted on the repayment of the loan it took from China.

In a statement issued on Thursday titled “DMO report: Nigeria defaulting in Chinese loan repayment,” the debt office said Nigeria has not breached the agreement it signed with any creditor.

“Nigeria is fully committed to honouring its debt obligations and has not defaulted on any of its debt service obligations.”

The debt office said, “The attention of the Debt Management Office (DMO) has been drawn to a publication by some media houses claiming that Nigeria has defaulted in debt repayment to China, for which it claimed, “penalties stand at N41.31 billion.”

“The public is advised to ignore the publication as it is false.

“A closer look at the media publication shows that the body of the publication is completely detached from the headline, which gives the impression that the publishers of the report may have set out to mislead the public.

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“The public is assured that Nigeria is fully committed to honoring its debt obligations and has not defaulted on any of its debt service obligations. The media report should therefore be disregarded.”

The report being rebutted said that Nigeria had incurred a penalty of N41.31 billion for defaulting on a Chinese loan used ostensibly to reactivate some of the country’s rail lines.

The basis for the alleged default is linked to the spate of attacks on rail tracks and the kidnapping of train passengers, all of which resulted in the stoppage of train services on some routes for a while.

The loss of revenue from the stoppage of train services, which is supposed to feed the purse from which repayments are to be made, informed the report on the alleged default.

The DMO, however, was silent on the current status of the Chinese loans to Nigeria.

The Chinese loans were used for the completion of the Idu-Kaduna section of the Nigeria Railway Modernisation Project, the Lagos-Ibadan section of the Nigeria Railway Modernisation Project, and the Abuja Light Rail Project.

Nigeria currently owes China $4.293 billion, going by the report of the country’s debt situation as of December 31, 2022.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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