DMO: No Worries over Chinese Loans

The Debt Management Office (DMO) has ruled out any form of concerns over Nigeria’s indebtedness to China, declaring that Chinese loans are not only project-tied but also configured to be concessional.

The agency has also assured that Nigeria has not defaulted in its debt service obligations, both at the domestic and external scenes.

In an interview held last night with ARISE NEWS Channel, a sister broadcast arm of THISDAY Newspapers, the DMO Director General, Ms. Patience Oniha noted that all the loans from China are project-tied and concessional, adding that servicing such loans had not constituted problems.

According to her, the Chinese loans, which amounted at about N3.2 trillion constituted just about 11 per cent of total external debt stock.

She said: “I know that last year, there was a lot in the public space about borrowings from China. All of the loans we have from China--the stock of bilateral credit (which is where China belongs) is low relative to the total public debt stock.

“Loans from China are about N3.2 trillion which was about 11 per cent of total external debt. Okay, that was small. But to add, those are all concessional loans. No reasons to be worried about them. They are all project-tied, which Nigerians should be happy about.

“You can see all the physical infrastructure - whether it is the airports or the rail lines or the roads; you can see them. So, we don’t see any reasons for concerns, and they are all project-tied and concessional.

“There was a lot of debate in terms of sovereign immunity and all of that, but we did get proper interpretations, both from China and the Ministry of Justice and we also as DMO, we have facts behind China loans on our website way back in June 2020. So, we are not worried about them. They are all project-tied and are concessional.”

On whether the current public debt of about N33 trillion is sustainable, Oniha noted that in terms of debt-to-GDP, it was sustainable, adding that the challenge was debt service-to-revenue.

Oniha noted that some countries have had problems with servicing their external debt, which has not been the case with Nigeria.