https://thestreetjournal.org/fg-borrowed-4-85bn-from-china-france-three-others-in-last-eight-years-dmo/

The Debt Management Office (DMO) has said that the federal government borrowed $4.85 billion from five countries between June 30, 2015 and October 30, 2022.

Data from the external loans reports of the DMO showed that within the period, Nigeria’s borrowings from the five countries increased by 206.96 percent from $1.58 billion in June 2015 to $4.85 billion by October 2022.

The five countries include China, France, Japan, India and Germany.

In June 2015, Nigeria borrowed $1.39 billion from the Exim Bank of China, $140.25 million from Agence Francaise Development in France, $43.10 million from Japan International Cooperation Agency, $11.73 million Kreditanstalt Fur Wiederaufbua in Germany.

By September 2022, the bilateral debt profile increased with Nigeria owing China $4.09 billion.

It also owed France $526.48 million, Japan $57.11 million, Germany $153.06 million, and India $27.17 million.

Based on the data from DMO, the nation’s first accumulated debt from India under the administration of President Muhammadu Buhari was recorded to be $14.79 million in 2018.

However, China has been Nigeria’s largest bilateral creditor over the years, according to The Punch.

The federal government had sought loan facilities from Chinese lenders to implement several infrastructural projects, including standard gauge rail lines.

In a document titled, ‘Status of Chinese loans as at September 30, 2021’, the DMO disclosed that 15 projects were funded with Chinese loans, and four of the 15 projects are rail-related.

The federal government recently spent $548.67 million (N246.11 billion) to service railway-related debts between 2016 and 2022.

The nation’s current bilateral debt was 12.24 percent of the total external debt of $39.66 billion, excluding states’ external debt.

Recall that Nigeria’s total external debt rose from $10.32 billion on June 30, 2015 to $40.06 billion as at June 30, 2022.

It covered external borrowings by the federal government and states.

The nation’s external debt ballooned as the naira lost value, increasing Nigeria’s debt service burden and worsening its ability to service debt.

The International Monetary Fund (IMF) recently said that the long-term rate of the depreciation of the naira equated to a loss of 10.6 percent of its value annually since 1973.

According to the IMF, this rate was 1.5 times higher than the long-term rate of the currencies of other emerging markets and developing economies at 7.2 percent and sub-Saharan Africa at seven percent over the same time period.

Also, the Bank of America recently said that Nigeria’s local currency unit was set to weaken further next year as its current exchange rate to the dollar was well above fair value.

The special advisor to the director (Custom Union and Taxation in ECOWAS), Gbenga Falana, while emphasising that the debt profile of most of the countries in the sub-region was mounting, stressed the need for West African countries to look inwardly and finance local projects through effective domestic resource mobilisation.

Experts have continued to warn that the continued increase in the nation’s debt stock, portends some risks for the country.

The managing director/chief executive officer of Cowry Asset Management Limited, Johnson Chukwu, while speaking on Wednesday, January 18, said that the high external debt would impose a huge debt service on the economy.

Chukwu said that, “This will impose a huge debt service on the economy, particularly at a period when we have low revenue from oil sales.

“If the revenue from oil sales does not improve, then the federal government will be struggling to meet that debt service obligation to foreign lenders.”

However, he noted that Nigeria could service its foreign debt at the current level, but a constant increase in debt without a corresponding increase in foreign currency earnings could put the country in a difficult position.

In addition, the Chief Executive Officer of SD& Capital Management, Idakolo Gbolade, cautioned the federal government against constant borrowing, adding that it should examine how it borrowed to save the unborn generation from unending debt.

He said that, “Government borrowing to fund infrastructure is not bad but the problem is that the projects should be made to repay the loans.

“The government needs to look into this. For example, projects like roads should be tolled, and the proceeds used for repayments.”

A brainless incompetent disaster called buhari.
Well done