Begging for crumbs
Yes, Nigerians should worry about a debt trap, but there is another, perhaps even bigger worry: our inability to see bigger visions and think a bigger future. As a result, we are asking of China all the wrong questions. We should be imitating their advanc
Concluding an article on Nigeria’s borrowing from China, “Sovereignty Above Seedy Loans,” [March 11, 2018], I said: “Something, clearly, is fiction. The real fear is how much fiction there is in the China file.”
That fear was not allayed last week when President Muhammadu Buhari, speaking at the Forum On China-Africa Cooperation in Beijing, dismissed suggestions that the Chinese loans constitute a debt trap. The government said Nigeria-China cooperation through the forum has resulted in the execution of over $5 billion “vital infrastructure” projects across the country.
That is strange. During his visit to Nigeria last year, Wang Yi, China’s Foreign Affairs Minister, said his country would invest an “additional $40bn” billion in Nigeria.
And then Geoffrey Onyeama, Nigeria Foreign Minister, stated: “China has already invested or financed a total number of $22 billion projects (sic) here in Nigeria, another $23 billion projects are on-going.”
Inconsistencies, contradictions and misinformation of this nature scare me far more than the debt trap because they could make that trap more menacing for our children.
In Beijing, Mr. Buhari affirmed that Nigeria would repay everything. “Some of the debts incurred are self-liquidating,” he said. “Our country is able to re-pay loans as and when due in keeping with our policy of fiscal prudence and sound housekeeping.”
Perhaps. As someone who has written repeatedly on this subject, it seems to me there are a couple of problems beyond Nigeria being able to pay the debts or not.
The first is managing the loans, including ascertaining what has been borrowed, and what was done with it.
Take the Abuja light rail, a project the Buhari administration commissioned two months ago. First bandied around in the final days of the Olusegun Obasanjo administration, the project became notable in August 2010 when the government of President Jonathan approved an $841m contract for it. In July 2013 when Mr. Jonathan visited China, $500m was negotiated as part of the $3bn loan he signed.
At the commissioning of the project two months ago, Muhammad Bello, the Minister of the Federal Capital Territory, said the Federal Executive Council approved the project in 2017 for construction at a cost of $1.3billion,” and that Phase 1, which was being commissioned, had cost $823million.
And yet last week, the same government had a different story, quoting Buhari as saying: “For Nigeria, our partnership with China through the FOCAC platform, has resulted in the construction of the first urban rail system in West Africa. This $500 million project in Abuja was commissioned in July this year.’’
The Nigeria leader also said the Abuja and Kaduna “was commissioned…at a cost of $500 million.”
That is also inaccurate. The contract was signed in October 2009 for $874m; $500m of that was obtained as a concessionary loan from China’s EXIM Bank.
The point is that we cannot really brag about a “policy of fiscal prudence and sound housekeeping” if we have the basic story wrong. How do we know our “lazy” children can handle a mess we do not know the size of?
Consider, for instance, that in 2013, Nigeria obtained $500m from China to fund four airport terminals and for the Abuja rail project. Last week, Nigeria was also asking China for funding for four airport terminals and the same Abuja rail.
And while we were still on our knees, we asked for help with the Mambilla hydropower project, preferably through “concessionary loans from China as any alternative funding arrangement will adversely impact the project’s viability.”
What does this mean? It is already three and a half years since Buhari met in Abuja with Chinese officials on the project, saying he wanted it completed quickly. Officials of the Ministry of Power said at that time the $3.2bn cost might be reviewed up to a whopping $6bn. We can borrow from China, but from whom do we borrow time, our children?
Buhari spoke last week of various projects being undertaken throughout Nigeria, thanks to China. I hoped to hear him talk about the $1.07bn road contract the Ministry of Delta Affairs signed in November 2013; and the $11.97bn Lagos-Calabar railway signed in November 2014 but which was renegotiated by the Buhari government. Both projects are due this year.
I hoped to hear about the 300MW solar power project in Shiroro, Niger State, for which an $478m agreement, among many others, Buhari signed with China in 2016.
I hoped to hear about the $1bn greenfield expressway to be developed to link Lagos and Abuja, but not one word emerged. And not one about the $2.5bn agreement for the Red Line of the Lagos Metro Rail Transit project.
Yes, Nigerians should worry about a debt trap, but there is another, perhaps even bigger worry: our inability to see bigger visions and think a bigger future. As a result, we are asking of China all the wrong questions.
We should be imitating their advances and ambitions in science, technology (including Artificial Intelligence), medicine or agriculture. We should be asking how to multiply our productivity, as they have.
We have awful-almost traditional-problems with electricity, but China is the world’s largest producer of solar power; we can adopt their ingenuity.
We ask China to build us airport lounges and counters and restaurants. But China is thinking and digging deeper into the future, building incredible highways, bridges and rail, sometimes in almost impossible terrain and across vast rivers. It has the world’s largest network of bullet trains, for instance, but we choose to spend vast amounts to accomplish less.
Instead, we negotiate “modern” contraptions that can be completed in two or three years, only to mismanage implementation until the projects are overrun by Time, irresponsible governments, and population growth.
But anyone who is paying attention would observe that whatever the Chinese say in public, they do not obstruct us when we showcase our naivete or choose to travel in circles. Remember that $20bn facility Nigeria was chasing at the China Exim Bank two years ago, for which Udoma Udo Udoma, the Minister of Budget and National Planning, led a delegation early in 2016?
The Chinese did not budge from various conditions it gave to the Nigerian government, including that they would appoint officials to supervise all funds released.
It reminded you of Switzerland asking Nigeria for specific assurances before releasing to her large sums in recovered loot. And if you are sensitive you might remember the recent NBA conference in Abuja when Philip Hackett, a senior British lawyer, explained why Nigeria has a poor asset return history: “The UK’s position is that Nigeria cannot be trusted with its money,” he said.
But sometimes more disturbing is not our character, but poor capacity. For instance, in his National Day address in October 2016, President Buhari said that General Electric would invest $2.2bn “in a concession to revamp, provide rolling stock, and manage the existing [rail] lines.”
That claim was denied the following day by the company but restated subsequently by Vice President Yemi Osinbajo.
The morale of the tale is this: there is little others can do for you if you would rather remain on your knees and beg for crumbs.
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