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  • Nigeria repays $841.5 mln in China loans, outstanding now at $3.26 bln

Nigeria repays $841.5 mln in China loans, outstanding now at $3.26 bln

By on May 4, 2021 0 109 Views

By Oludare Mayowa

Nigeria has reduced its indebtedness to China by $841.55 million in both principal and interest repayment as of December 2020, according to the latest data released by the Debt Management Office (DMO) on Tuesday.

The country’s outstanding debt to China stood at a total of $3.26 billion as of December 2020, the debt office stated in the data.

Nigeria repaid $449.89 million in principal and $391.66 million in interest to bring down the total debt from $3.71 billion to $3.26 billion in December, the DMO data showed.

However, the outstanding debt due to China from Nigeria as of the end of last year is higher than the  $3.12 billion reported by the debt office for June 2020.

The DMO had in June 2020 put the total debt from China at $3.12 billion, noting that the loans sourced from China were expended on railway modernisation, airport terminals expansion projects and road rehabilitation projects across the country.

Breakdown of the borrowing from China showed that Nigeria sourced $126 billion to finance the modernisation of Lagos to Ibadan rail line project.

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Nigeria also borrowed $984.32 million to fund the Nigerian Zungeru Hydroelectric Power Project, $500 million apiece to finance Abuja light rail project and Nigerian Railway Mordernisation Project (Idu- Kaduna section) projects.

The latest DMO information on China debt did not reflect the recent $1.5 billion earmarked for the construction of rail line from Kano to Maradi, in Niger republic.

The last of the debt by Nigeria was contracted in December 2019, which means that either the new borrowing is yet to be signed off or agreed upon by the two countries.

Interest yield on the loan range between 2.00 percent and 3.00 percent with tenor of the debt put at 12-year and 20-year.

Nigeria and other African countries are said to be heavily indebted to China, which threatens the sovereignty of many countries that are unable to redeem the debt.

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