The Federal High Court in Abuja has ordered Muhammadu Buhari, Nigeria’s president, to account for a $460 million loan taken from China for a Closed-Circuit Television (CCTV) project which failed to materialise.
Justice Emeka Nwite of the Federal High Court, Abuja, ordered the Buhari administration to also publish the names of Chinese and local contractors who collected money for the same project.
The Socio-Economic Rights and Accountability Project (SERAP) had issued a Freedom of Information lawsuit FHC/ABJ/CS/1447/2019 after the federal government refused to state the project’s progress.
“Nigeria is servicing the loan,” Zainab Ahmed, Nigeria’s minister of finance, reportedly said in 2019. “We are servicing the loan. I have no information on the status of the CCTV project.”
“There is a reasonable cause of action against the government. Accounting for the spending of the $460 million Chinese loan is in the public’s interest. It will be inimical for the court to refuse SERAP’s application for judicial review of the government’s action,” Justice Nwite said.
“The Minister of Finance is in charge of the finances of the country and cannot by any stretch of the imagination be oblivious of the amount of money paid to the contractors for the Abuja CCTV contract and the money meant for the construction of the headquarters of the Code of Conduct Bureau.”
The Buhari-led federal government is well-known for taking foreign loans, notably from the People’s Republic of China.
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Concerns over the volume of Chinese loans made Nigeria’s Debt Management Office (DMO) publish the federal government’s justification for taking such loans in late 2020.
“As at March 31, 2020, the total borrowing by Nigeria from China was $3.121 billion (₦1,126.68 billion at $/₦361). This amount represents only 3.94% of Nigeria’s Total Public Debt of $79.303 billion (₦28,628.49 billion at $/₦361) as at March 31, 2020. Similarly, in terms of external sources of funds, Loans from China accounted for 11.28% of the External Debt Stock of $27.67 billion at the same date,” the DMO wrote.
“The total borrowing from China of $3.121 billion as at March 31, 2020, are concessional loans with interest rates of 2.50% p.a., tenor of twenty (20) years and Grace Period (Moratorium) of seven (7) years.
“The $3.121 billion loans are project-tied loans. The projects, (eleven – 11 in number as at March 31, 2020), include: Nigerian Railway Modernization Project (Idu-Kaduna section), Abuja Light Rail Project, Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos and Port Harcourt), Nigerian Railway Modernization Project (Lagos-Ibadan section) and Rehabilitation and Upgrading of Abuja – Keffi- Makurdi Road Project.”
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Since 2020, Nigeria has taken more loans from China, and the value of the naira against the US dollar has decreased. The president normally asks the National Assembly to approve such loans. Commentary around these loans often points to utility and Nigeria’s ability to repay its foreign debts.
Buhari’s administration will hand over to Bola Ahmed Tinubu’s after the May 29 presidential inauguration ceremony.
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