DMO: Domestic assets are not used as collateral for Chinese loans
Debt Management Bureau (DMO) says no domestic assets were used as collateral for soliciting loans from China.
Patience Oniha, managing director of DMO, said this during an interview with NAN on Saturday.
In recent times, social and mainstream media have been inundated with information about some African countries, including Nigeria, facing the threat of losing vital domestic assets to the Asian country due to high indebtedness.
The media also claimed that Uganda had “ceded” its only international airport and other assets in the country to China over an unpaid loan agreement – a claim by the two countries. having denied.
Reacting to the information, Oniha said China’s loans to Nigeria were largely concessional, as no domestic assets were labeled as collateral.
She also revealed that Chinese loans, which currently stand at $ 3.59 billion, constitute only 9.4% of Nigeria’s total external debt stock of $ 37.9 billion.
“Nigeria’s total debt outstanding as of September 30 was $ 37.9 billion, this figure included the external debt outstanding of the federal government, 36 state governments and the Federal Capital Territory.” , said Oniha.
“But China’s total loans stand at $ 3.59 billion, or 9.47 percent of total foreign debt. The loans did not require any national assets as collateral; they were largely concessional.
Oniha urged Nigerians to always make an effort to verify sensitive information from official sources before releasing it.
She said that before obtaining foreign loans, sensitive measures are taken by several government institutions to ensure that they are beneficial to the nation.
“Before a foreign loan is taken out, including the issuance of Eurobonds, they are approved by the Federal Executive Council and subsequently the National Assembly,” Oniha said.
“An important and extremely critical step is for the loan agreements to be approved by the Federal Ministry of Justice.
“An opinion is issued by the Attorney General of the Federation and the Minister of Justice before the signing of the agreements.
“Several measures that work in a transparent manner have been put in place to ensure that debt data is available and that the debt is serviced as it falls due. Provisions are explicitly made for debt service in annual budgets.
The DMO chief said the loan agreements provide for a number of steps to be taken to resolve disputes when they arise.
“The first action is that the parties have to resolve it on their own and if that fails, they go to arbitration,” she said.
“In other words, a lender, in this case China, wouldn’t just pounce on an asset at the first sign of a dispute, including defaults. “
She said the DMO maintains proper debt records, provides projections for debt service and processes actual payments for debt service.
Oniha said these functions are carried out in conjunction with the Office of the General Accountant of the Federation (OAGF) and the Central Bank of Nigeria (CBN).