…will go to court as well as write world body disassociating the youths from the loans
The Prominent Civil Rights Advocacy Group; Human Rights Writers Association of Nigeria (HURIWA) said the new form of economic colonialism foisted on Nigeria by China, occasioned by her Toxic and Enslaving Loan Agreements with Nigeria will enslave the coming generations.
Blaming President Muhammadu Buhari for Attempting to Foist a situation whereby most Nigerians will not be able to opt out of the Future and Slave Labour Camp of China, HURIWA charged Nigerians
In a statement made available to the media on August 1 in Abuja and signed by it National Coordinator Emmanuel Onwubiko and the Director National Media Affairs Zainab Yusuf , HURIWA wants Nigerians to protest against taking of more of such loans.
It stated that “It was President John Adams; an American Founding Father who made a strong assertion in 1826, that there are two ways to conquer and enslave a nation”
Continuing HURIWA stated that according to him, one of the ways is by the sword and the other is by debt.
Since 2000, Nigeria has borrowed about $4.83 billion from China, promoting them to the status of Nigeria’s largest bilateral financing partner and at present, 8.5% of the country’s external loans are from China.
“Although most of this borrowing is done through China’s Export-Import (Exim) Bank, which offers concessionary loans at low-interest rates and with long maturity periods, Nigeria’s debt servicing capacity is already significantly compromised. Currently, 60 of every 100 naira generated by the Government goes towards servicing debt, with interest payments exceeding capital spending since 2014”. HURIWA revealed.
Continuing the human rights Organisation said “data from the China-Africa Research Initiative has led to startling revelations. Third only to Algeria and Angola, Chinese companies generate their highest revenue from Nigeria. These companies have earned $34.2 billion from implementing projects in Nigeria, some of which are tied to loan agreements”
On the issue of employment, HURIIWA stated that about 64,500 Chinese workers are employed locally. With our undiversified revenue base and unemployment rate at 20%, we are forgoing alternative streams of income and jobs.
This “China takeover” has raised skepticism on China-Nigeria economic relations, particularly our rising indebtedness to the Chinese. This Statement makes an approach towards the concerns over the strict terms, style of borrowing, and lack of transparency China loan contracts.
The Organisation said a full-blown media and Twitter panic erupted on Wednesday July 29 in Nigeria over reports that the House of Representatives Committee on Treaties, Protocols, and Agreements in Abuja chaired by Nicholas Ossai discovered a clause in a Chinese loan contract that supposedly puts the country’s sovereignty at risk in the event of default.
The clause described as “lethal” by the panel is in article 8(1) of the commercial loan agreement between Nigeria and Export-Import Bank of China, and reads thus: “The borrower (Nigeria) hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.”
The contract in question was a 2018 loan for $400 million from the China Exim Bank to build Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase II Project.
The chairman of the committee also said there are agreements signed by the Ministry of Communications and Digital Economy where the country’s sovereignty will be breached if it defaults in the agreements.
Generally, there are global concerns about the alleged fraudulent, irregular, and underhand features of Chinese loan contracts with some African countries, which had resulted in a new form of economic colonialism foisted by China.
HURIWA said the history of Chinese loans, especially in Africa has a growing concern where several observers, including some of the United States Representatives, have warned many nations on what they described as Chinese Debt trap diplomacy, as the Asian nation allegedly used finance as a weapon in many developing countries.
Since all Chinese loans are tied to infrastructural developments, some of the African nations have had to forfeit their stakes in the infrastructure, which they used as collateral, after they defaulted.
Sighting some examples HURIWA said “for instance, $7.4 billion of Zambia’s total $8.7 billion foreign debt is owed to China, representing a large debt burden, given the relatively small size of Zambia’s economy. It was reported in late 2018 that the Zambian Government was in talks with China that might result in the total surrender of the state electricity company ZESCO as a form of debt repayment since the country had defaulted on the plethora of Chinese loans for Zambia’s infrastructure projects”
Another example is Kenya which may soon lose its largest and most lucrative port, Port of Mombasa to its creditor (China) after it defaulted in the refund. This could force Kenya to relinquish control of the port to China.
One of the most cited examples of alleged debt-trap diplomacy by China is a loan given to the Sri Lankan Government by the Exim Bank of China to build the Magampura Mahinda Rajapaksa Port and Mattala Rajapaksa International Airport.
The state-owned Chinese firms’ China Harbour Engineering Company and Sinohydro Corporation were hired to build the Magampura Port at a cost of $361 million, which was 85% funded by China’s state-owned Export-Import Bank at an annual interest rate of 6.3%. Due to Sri Lanka’s inability to service the debt on the port, it was leased to the Chinese state-owned China Merchants Port Holdings Company Limited on a 99-year lease in 2017.
According to statistics, Nigeria has obtained 17 Chinese loans to fund different categories of capital projects, and Nigeria will still be servicing the Chinese loans till around 2038, which is the maturity date for the last loans obtained in 2018.
Nigeria owes China about $3.1 billion, more than 10% of the $27.6 billion external debt stock. Minister of Finance, Zainab Ahmed, disclosed in February that the Federal Government decided to go for a $17 billion loan from China as the World Bank and the African Development Bank’s (AfDB) failed to show much interest in Nigeria during the recession.
But can Nigeria refund the loan? HURIWA thinks otherwise as experts have argued that if care is not taken; the nation may fall into the Chinese Debt Trap.
The organisation is worried because it believes Nigeria lacks accountability, transparency, and responsibility to refund the loans. HURIWA notes that when it comes to loans, Nigeria has failed to implement the three factors in its engagement with the Chinese.
“Chinese Exim Bank has offered $6.6 billion to Nigeria and that is quite significant. We have to look at the total debt and the capacity to repay not just to China but to our creditors. Our Debt independent revenue is at 96% now. That means for every N1 we earn, 96 kobo is used to refund loans. That has passed a critical threshold.
What it means is that we lack the ability and we don’t have the headroom anymore to repay because our independent revenue has been strangulated by our enormous debt hanging over the Federal Government as it stands now”
Therefore if Nigeria continues to increase Chinese loan, it is an indication that the nation has not considered the history of Chinese loans.
“Out of 64 countries that host the Chinese Belt and Road initiative projects, 20 have gone under distress and 8 are about to lose their sovereign debt sustainability if they should take any further loan. If that were supposed to be a good guide, it means Nigeria needs to be very careful with this type of loan contracts which threatens our sovereignty” HURIWA posited.
It stated that various experts have seen this Chinese cycle and there is need to be careful as what normally happens is that the Chinese will begin to take over infrastructure asset, which is what some call Chinese Chopstick Imperialism and the experience is not just pleasant.
Chinese strategically tie loans to infrastructure and that is with the intention of taking possession of the infrastructure asset if there is the default, as such asset became their collateral.
More worrisome is that Nigerian Government is currently facing a legal battle to overturn the judgment of a United Kingdom Court that awarded a $9 billion debt payment in the Process and Industrial Development deal (P&ID).
HURIWA is concerned that the debt profile of the country has continued to grow and had on several occasions lamented that the Country’s increasing debt profile is a way the political elites are robbing the children and youths to pay for their greed.
The basis for this concern stems from the figures presented in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning.
The figure shows that while Nigeria spent a total sum of ₦943.12 billion in debt servicing in the first quarter of 2020, the Federal Government’s retained revenue for the same period was only ₦950.56 billion.
Already, a quarter of Nigeria’s N10.3 trillion (proposed) 2020 budget, that is N2.5 trillion, goes to debt servicing. The budget is still being considered by federal lawmakers.
Noteworthy is the fact that Chinese loans are disbursed by the EXIM Bank, with interest subsidised by the country’s Ministry of Commerce, which assigns (Chinese) contractors to execute projects tied to the loans.
This chain barely allows cash to get into the hands of the recipients; rather, the loans are offered in the form of projects.
Most of the funds given out actually go back to them by way of supplies, construction contracts with all the equipment brought over from China itself.
“”Therefore, we are by this Statement demanding that the Nigerian Government should within the next 72 hours pull away from the toxic and enslaving loan agreement with China, which threatens our sovereignty. Failure to do so, in our capacity as a prominent Civil Rights Advocacy Group and in a bid to advance the single agenda of building a formidable and economically strong united Nigeria in general and the future of our youths in particular, we will mobilize Civil Rights Advocacy groups in Nigeria to challenge this new form of economic colonialism foisted by China and signed off by the President Muhammadu Buhari-led administration in court”
HURIWA stated that additionally, it shall “write to the United Nations and China to dissociate the entire youths from such a thievery being arranged by the APC led Federal Executive Council of Nigeria, as well as consider protests to the Embassy of China in Abuja if the enslaving loan agreement is not discontinued.
Similarly, we call on the United Nations to conduct plebiscite on the loan request while warning that if the loans are received and the clause on forfeiture of sovereignty is not legally voided, then it will motivate millions of Nigerians to begin Self Determination agitation or the dissolution of Nigeria'”
The orgainsation put the blame squarely on President Muhammadu Buhari for attempting to foist a situation whereby most Nigerians will not be able opt out of the Future and slave labour camp of China, which is what the loans agreement is all about. A stitch in times saves nine.