Nigeria’s Chinese Debt Jumps To $4.73bn

By Alfred Ifemosun

The Debt Management Office (DMO) has disclosed Nigeria’s debt to China increased by $800 million in one year, from $3.93 billion as of June 30, 2022, to $4.73 billion as of June 30, 2023.

The data on Nigeria’s external debt profile from the DMO showed that the debt involves concessionary loans that the Nigerian government obtained to finance the execution of infrastructural projects ranging from power generation, railways, water supply, airport terminals, agricultural processing and communication.

Projects being executed with Chinese loans include the Nigerian National Public Security Communication System project, Wu-Kaduna section of the railway modernisation project, Abuja light rail project, Nigerian Information and Communication Technology infrastructure backbone project, Abuja, Lagos, Kano and Rivers airport terminals’ expansion project, Zungeru hydroelectric power project, 40-parboiled rice processing plants project, Lagos–Ibadan section of the railway modernisation project, and rehabilitation/upgrading of the Abuja-Keffi-Markurdi road project.

The first Chinese loan, a sum of $200 million agreed on in 2006 to finance the Nigerian Communications Satellite project, has been cleared by the Federal Government with additional payment of $40.02 million interest.

Nigeria’s rising indebtedness to China underscores the close economic ties between both countries. According to an article published by the Chinese Ambassador to Nigeria, Cui Jianchun, posted on the website of the Ministry of Foreign Affairs of the People’s Republic of China, from 2016 to 2021, said that bilateral trade between Nigeria and China increased by nearly 142 per cent.

The Chinese ambassador added that in the first ten months of 2022, the bilateral trade volume reached $20.04 billion. Currently, Nigeria is China’s third largest trading partner in Africa, and China is Nigeria’s largest source of imports.