Connect with us

News

$3.48Bn Loan: Nigeria Risks Losing Assets to China – Experts

Published

on

Kindly share this post

Economic and financial experts have warned the Federal Government that Nigeria risks losing key national assets to China in the event that it defaults in paying back loans obtained from China which is currently put at $3.48bn.

$3.48Bn Loan: Nigeria Risks Losing Assets to China – Experts

According to a report by Punch, the experts spoke against the backdrop of the possible takeover of Uganda’s only international airport and other key assets over the East African country’s inability to repay a $207m loan obtained on November 17, 2015 from the Export-Import Bank of China.

The loan has a maturity period of 20 years including a seven-year grace period.

According to the deal signed with the Chinese lenders, Uganda will have to surrender its only international airport.

The Uganda Civil Aviation Authority said some provisions of the financing agreement with China exposed the Entebbe International Airport and other Ugandan assets which might be taken over by Chinese lenders upon arbitration in Beijing.

China has reportedly rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan.

This came as  Rotimi Amaechi, minister of Transportation, in August 2020 hinted about the possibility of Nigeria forfeiting its assets to China in the event of loan default.

Amaechi reportedly said Nigeria had waived immunity on a loan, which means China could take the country to arbitration in the event of a default.

The minister, however, added that there would be no need for China to claim any infrastructure once Nigeria repaid its loans to the Asian country.

“We must learn to pay our debts and we are paying, and once you are paying, nobody will come and take any of your assets,” Amaechi said.

However, financial analysts hinted about the possibility of Nigeria forfeiting key national assets to China if the country defaulted on its $3.48bn loans.

They also advised the Federal Government to properly review the loan agreements with China to save the country from facing a situation similar to that of Uganda.

Idakolo Gbolade, chief executive officer of SD&D Capital Management, said Nigeria might forfeit certain assets in the event of a loan default.

Asked if Nigeria faced any risks on its China loans, Gbolade said, “Yes, it is very possible. If you remember about a year ago, there was serious concern in the National Assembly on the loans given by the Chinese Exim Bank to us, and I am sure the loan clause also includes forfeiture of national assets.”

The expert, however, expressed confidence that Nigeria was capable of paying back its debt.

Akpan Ekpo,  economist and professor of Economics and Public Policy at the University of Uyo, said the development in Uganda was worrisome and exemplified some of the dangers of borrowing from external sources.

He, therefore, advised the government to ensure that loan agreements with China were properly appraised.

Ekpo said, “It is an issue of concern; that is why in any loan agreement with China, we have to read in between the lines. We have to make sure we really understand their agreements.

“We should make sure that Nigerians are involved in the loan negotiation process. Experts should be carried along so that they can properly understand both the agreement in English and in Chinese.

“If the loans have clauses that may cost us our assets or even our sovereignty – as the debate was earlier in the year – that would be disastrous.

“So they should take experts with them when they go to negotiate the loans they collect from China, not just people from foreign affairs.”

Sheriffdeen Tella, professor of Economics at the Olabisi Onabanjo University, Ogun State, equally expressed a similar view, stressing that all loan agreements between Nigeria and external sources should be properly studied by experts.

He said, “It could happen to any African country because they are all thinking of borrowing. But I think that since people have kept the conversation alive now, the government will be very careful with loans collected from China.

“There is, however, the need for an assessment of government external debt from different sources now. We have to start looking at it and there is a need to study the documents that contain the agreements of some of these loans to prevent a similar occurrence.

“We need to start asking ‘what are the contents or the conditions of the loans?’ There is also a need for the government to create a means for offsetting such debts.”

Johnson Chukwu, managing director of Cowry Asset Management Limited, said the country should not have a problem paying back the loan if the economy thrived sufficiently.

He said, “An interest of 2.5 per cent is not high. The key challenge is that did we invest the money in productive assets, and are we getting the value for the money? Was the project cost-optimal?

“It is important to note that investment in infrastructure should lead to an expansion in the country’s ability to generate revenue. If the economy thrives, paying back the loan should not be a problem.

“However, if certain reasonable conditions are not met, it may have a catalytic effect on the economy with the country finding it difficult to pay back the loan.”

Although the Federal Government has been mostly secretive about the terms of the agreement of its China loans, the Debt Management Office has made some statements on them in recent times.

In a statement in June, 2020, the DMO said, “The total borrowings from China of $3.121bn as at March 31, 2020, are concessional loans with interest rates of 2.5 per cent per annum, tenor of 20 years and grace period (moratorium) of seven years.”

According to the DMO, the terms are compliant with the provisions of Section 41 (1a) of the Fiscal Responsibility Act, 2007.

In addition, the low interest rate reduces the interest cost to government while the long tenor enables the repayment of the principal sum of the loans over many years.

Eleven projects, ranging from water supply, power generation, railways, airport terminals, communication to agricultural processing are funded by the loans acquired.

Patience Oniha, director-general, DMO, had in February said, “So far, let’s be very clear that there has not been any default, whether of local or international debt.”

The earliest of the funding agreements between Nigeria and China was signed in 2010 with an interest rate of 2.5 per cent yearly, a repayment period of about 20 years and a grace period of seven years.

If Nigeria is unable to pay its first debt by 2038, the country may have to lease out any of the Chinese-funded projects in Nigeria to China.

The first loan project was for the Nigerian national public security communication system project with $399.50m agreed on December 20, 2010 and disbursed.

The second loan was for the Nigerian railway modernisation project (Wu- Kaduna section) with $500m agreed on December 20, 2010 and disbursed.

While the third loan was for the Abuja light rail project with $500m agreed on November 7, 2012 and disbursed, the fourth loan was targeted at Nigerian ICT infrastructure backbone project with $100m agreed on January 5, 2013 and disbursed.

The fifth loan was meant for the Nigerian four airport terminals’ expansion project (Abuja, Kano, Lagos and Port Harcourt) with $500m agreed on July 10, 2013 but $455.28m was disbursed, which is 91.06 per cent of the agreed amount.

The sixth loan was for the Nigerian Zungeru hydroelectric power project with $984.32m agreed on September 28, 2013 but only $518.24m was disbursed, which is 52.65 per cent of the agreed amount.

The seventh loan was for the Nigerian 40 parboiled rice processing plants project (Federal Ministry of Agriculture and Rural Development), with $325.67m agreed on April 26, 2016, but nothing was disbursed.

The eighth loan was for the Nigerian railway modernisation project (Lagos – Ibadan section), with $1.27bn agreed on August 18, 2017 but only $759.84m was disbursed, which is 17.50 per cent of the agreed amount.

The ninth loan was targeted at the rehabilitation and upgrading of Abuja-Keffi-Markurdi road project with $460.82m agreed on August 18, 2017 but only $80.64m was disbursed, which is 59.96 per cent of the amount agreed.

The 10th loan was meant for the Nigeria supply of rolling stocks and depot equipment for the Abuja light rail project with $157m agreed on May 29, 2018, but nothing was disbursed.

Lastly, the 11th loan was for the Nigeria greater Abuja water supply project with $381.09m agreed on May 29, 2018, but nothing was disbursed.

In terms of repayments, Nigeria paid $102.68m to China in the first six month of 2021, while it still owes about $3.48bn

Nigeria also paid a total of $102.68m to the Exim Bank of China in the first half of this year.

Nigeria paid an interest fee of $42.54m, which is 73.76 per cent of the principal fee of $57.67m as debt service to the Exim Bank of China in the first three months of 2021

Alongside commitment charges of $1.98m, Nigeria paid a total of $102.20m.

In the second quarter of 2021, Nigeria paid an interest fee of $306,050, without paying the principal fee, as debt service to the Exim Bank of China in the second three months of 2021

Alongside commitment charges of $170,680, Nigeria paid a total of $476,730 in Q2 2021.

According to Punch reports, Nigeria has spent about $591.11m in five years on servicing the debts owed to the Exim Bank of China.

Nevertheless, Nigeria still owes China $3.48bn as of the end of June 2021.

 

Punch

 

 

 

 

 

 

 

 

 

 

 

 


Kindly share this post

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

News

Yahoo Mail Halts Free Storage Service, Caps at 20GB

Published

on

Kindly share this post

Yahoo Mail has announced a major shift in its storage policy, slashing the free email storage cap to 20GB and rolling out a new subscription model starting at $1.99 per month for 100GB.

The change, which takes effect immediately, marks a significant downgrade for many long-time users who have grown accustomed to Yahoo’s previously generous storage offering.

In a notice sent to users on Tuesday, the company urged account holders to review their current storage usage and consider paid upgrade options to avoid disruptions.

“Once you reach the 20GB limit, you will no longer be able to send or receive emails unless you either delete existing messages or upgrade your account,” the notice warned.

While access to inboxes will remain intact for now, users will be forced to clean up their accounts or move to a paid tier to maintain full functionality.

Yahoo has unveiled two new storage plans which are 100GB for $1.99/month and 1TB for $9.99/month.

For those seeking a more premium experience, Yahoo is also offering Yahoo Mail Plus, which includes 200GB of storage, an ad-free interface, and additional features. However, users opting for the 100GB and 1TB tiers will still be served ads, a move likely to frustrate those paying for expanded capacity.

To ease the transition, Yahoo is rolling out new tools to help users manage their inboxes more efficiently. These include real-time storage tracking, a usage dashboard, sorting options for large emails, and an attachment manager to help clear out space-consuming files.

Despite the enhancements, the abrupt downgrade has sparked concerns among users, particularly those with email archives spanning more than a decade. Critics argue the change could pressure many into paying for what was previously free, without a proportionate upgrade in value, especially considering ads remain in place for all but the premium Plus tier.

Yahoo’s new model brings it closer to competitors like Gmail, which offers 15GB of free storage shared across Gmail, Google Drive, and Google Photos. Google’s paid plans also begin at $1.99/month for 100GB, but offer additional benefits such as photo backups and expanded cloud services. Gmail also provides a cleaner experience, with minimal ads even on its free plan.

Yahoo Mail’s new 20GB limit applies exclusively to email storage, a slight advantage for users who don’t rely heavily on broader cloud services. But the real test will be how users respond to the newly imposed constraints and whether the value proposition is strong enough to convert them into paying subscribers.

 


Kindly share this post
Continue Reading

News

CAC to Delist 100,000 Dormant Firms After 90-Day Compliance Window

Published

on

Kindly share this post

Corporate Affairs Commission (CAC) in Nigeria has announced a significant move to strike off approximately 100,000 dormant companies from its register due to their failure to file annual returns for over a decade.

This initiative, aimed at cleaning up the nation’s business registry, was confirmed in a statement released by the CAC on Tuesday, 29 July 2025. The commission has granted these companies a 90-day grace period to submit all outstanding annual returns or face permanent removal from the database.

The CAC’s action is grounded in Section 692 (3) (4) of the Companies and Allied Matters Act (CAMA) No. 3 of 2020, which empowers the commission to delist defunct or inactive companies.

The statement, published on the CAC’s official website, urges affected companies to file their overdue returns and notify the commission via email at activation@cac.gov.ng to avoid being struck off.

The commission has also made it clear that it is illegal to conduct business under the name of a delisted company, as such entities are considered dissolved.

Registrar General Garba Abubakar previously noted that nearly 90% of registered companies in Nigeria are dormant, highlighting the scale of non-compliance. This crackdown is part of a broader effort to enhance transparency and ensure a robust business environment in Nigeria.

The CAC has advised stakeholders to verify the status of companies before engaging in transactions, warning that dealing with a dissolved company could lead to legal repercussions. Only a Federal High Court order can reinstate a delisted company, underscoring the gravity of the process.

The list of affected companies, numbering around 100,000, has been published on the CAC’s website, allowing businesses to check their status. Companies that have already filed complete annual returns but find themselves listed have been instructed to provide evidence of compliance by emailing compliance@cac.gov.ng within the 90-day window.

This initiative follows earlier warnings from the CAC, including a December 2024 announcement to delist 91,843 companies and a subsequent removal of 80,429 companies in November 2024, which included notable names like Innoson “Vinod” International Limited and Jolly Food Industries Ltd.

The 90-day grace period, starting from 29 July 2025, offers a final opportunity for these companies to regularise their status.

The CAC’s decisive action signals a commitment to fostering accountability and compliance within Nigeria’s corporate landscape, raising important questions about the operational challenges facing thousands of registered businesses.

As the deadline approaches, the commission’s efforts are expected to reshape the country’s business ecosystem, ensuring only active and compliant entities remain on the register.


Kindly share this post
Continue Reading

News

InfraCredit, AMDA Sign Partnership to Unlock Local Financing for Africa’s Mini-grid Sector

Published

on

Kindly share this post

InfraCredit, a specialised infrastructure credit guarantee institution, has entered into a strategic partnership with the Africa Minigrid Developers Association (AMDA) to boost access to long-term local currency financing for mini-grid and distributed renewable energy (DRE) projects across Africa.

The agreement aims to strengthen market development and address long-standing financing barriers in the mini-grid sector, especially in Nigeria and other underserved African markets.

The collaboration is aligned with InfraCredit’s Clean Energy Funding Programme (CEFP), which offers credit enhancement, due diligence support, and technical assistance to renewable energy developers.

“With an estimated 86 million Nigerians, alongside hundreds of millions across Africa—still living without electricity, bridging this energy access gap demands a pipeline of investment-ready, well-prepared projects that can unlock scalable capital and accelerate financial close,” said Chinua Azubike, CEO of InfraCredit.

“This partnership creates a practical pathway to scale the impact of our Clean Energy Funding Programme by equipping more developers to structure commercially viable mini-grid and DRE projects that qualify for long-term local currency finance,” Azubike added.

Through the agreement, both InfraCredit and AMDA will work together to facilitate technical assistance, share toolkits, and deploy credit modelling frameworks, including InfraCredit’s Distributed Renewable Energy Lending Toolkit (DRELT) and DRE Credit Rating Model. These tools aim to enhance the bankability of projects and improve developers’ ability to secure patient capital in local currency.

AMDA, which represents mini-grid developers operating in over 20 African countries, brings deep sector expertise and a strong network of DRE operators to the partnership.

According to Lamide Niyi-Afuye, CEO of AMDA, the collaboration addresses one of the most persistent challenges in the sector.

“We are pleased to collaborate with InfraCredit to address one of the most persistent barriers in the minigrid sector, access to affordable, long-term local currency finance,” said Niyi-Afuye.

“By aligning AMDA’s advocacy and technical support efforts with InfraCredit’s proven models and tools, we aim to accelerate the deployment of resilient, decentralised energy solutions that deliver tangible socioeconomic benefits in Africa. We view this partnership as a blueprint that will be used beyond borders, paving the way for broader regional impact,” he added.

The partnership will also support the development of transaction-ready pipelines, capacity-building initiatives, and investor-developer forums aimed at improving market transparency and accelerating the roll-out of commercially viable mini-grids.

By facilitating access to domestic blended finance and strengthening project preparation, the partnership hopes to unlock greater private sector participation, mobilise local capital, and expand clean energy access across unserved and underserved communities in Africa.


Kindly share this post
Continue Reading

Trending