The Director of Research, Nigerian Institute of International Affairs, Efem Ubi, has described as false the report that Nigeria is gradually giving up her authority to China on excessive borrowing.
Ubi disclosed this on Friday while speaking at an event organized by the Institute for Peace and Conflict Resolution. The theme is “Nigeria-China Relations: Reflections on Equal Friendship, Equal Partners and Prosperity in Solidarity,” In Abuja.
He noted that assertions regarding whether Nigeria can pay back the increasing Chinese debts and speculations regarding the loan terms were Western propaganda to damage Africa and China’s remarkable relations.
According to him, “Uninformed debates stem from skeptics based on lack of information, misinformation, and disinformation about the loans.
“This has often been described as Western countries’ propaganda to undermine the unprecedented relation between Africa and China.
“The result is that members of the public have had to depend on other sources for their information, more or less from the ‘roadside,’ where entrenched misinformation is common,” he said.
The director said the increasing public debt was not distinctive to Nigeria but global. He noted that “it is a global problem with about 40 percent of low-income developing countries either in debt distress or at high risk of default.
“That notwithstanding, it is important to note here that periodic sovereign debt crises not only decrease welfare for countries and their populations; they threaten regional and, at times, global political and financial stability.”
Ubi, while explaining the loans, noted that strategic infrastructural needs had informed the borrowing from China.
“The lack of finances, which has remained a core undermining factor for Nigeria’s inability to build and upgrade its infrastructure and constituted a significant constraint to overall Nigeria’s socio-economic development, is a triggering reason why Nigeria is borrowing.
“President Muhammadu Buhari buttressed this while meeting with the Presidential Economic Advisory Council on Sept. 15, 2020, when he said, “we are borrowing to finance infrastructure and for the interest of the country.”
“China is not the only country Nigeria is borrowing from. Nigeria is also borrowing from other countries and multilateral agencies, as the report from DMO has shown.
“However, the reason Nigeria is endeared more to China is the fact that it is the only one willing to invest where others have refused to, especially as regarding infrastructural development,” he added.
Ubi also noted that interest rates charged by the Chinese are low compared to other nations.
According to him, “With respect to Nigeria, China was the only country giving out loans with a low-interest rate of 2.8 percent”.