The Socio-Economic Rights and Accountability Project (SERAP) has called on the Minister of the National Capital Territory, Nyesom Wike, and the governors of Nigeria’s 36 states to publicly disclose details of all loans, debt and other foreign borrowings taken by China and guaranteed by the federal government, as well as the terms and conditions of all such loans, including collateral provisions.
In a statement by its deputy director, Kolawole Oluwadare, the group also called on Wike and the governors of the 36 states to disclose details of repayment obligations on all Chinese loans, debt and other external borrowings received and guaranteed by the federal government, as well as the interest rates on such loans and any defaults, rescheduling and debt exposures to China and other creditors.
SERAP also called on governors and the Minister of Finance to clarify all investment agreements with Chinese companies and the repayment history of all loans, liabilities and credit facilities received from China and other external creditors and guaranteed by the federal government.
Referring to its letter dated August 24, 2024, SERAP stated: “We are concerned that your State and the FCT may have failed to efficiently manage your debt obligations, particularly your external debt and investment obligations guaranteed by the Federal Government.
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“Failure to perform your obligations will contravene Section 6 of the Debt Management Office Establishment (Etc.), Act and will create financial risks and other burdens on Nigeria in relation to such Chinese loans, liabilities and other external borrowings.”
According to SERAP, “these Chinese loans, liabilities and other external borrowings of your State and the FCT may not have been used for the purposes for which they were borrowed nor on the terms guaranteed by the Federal Government.”
In its letter, the group stressed: “SERAP is concerned that there is a significant risk of default on your State’s and the FCT’s Chinese loans, accounts payable and other foreign borrowings guaranteed by the Federal Government.
“There is also a significant risk of seizure of Nigerian assets in foreign jurisdictions by multilateral and bilateral agencies and other creditors if your State and the FCT do not satisfactorily comply with and meet the terms and conditions of Chinese loans, debt and other external borrowings guaranteed by the Federal Government.
“The apparent inadequacy of the safeguards and accountability mechanisms for these Chinese loans, liabilities and other foreign exposures could also expose Nigeria’s assets in foreign jurisdictions to seizure.
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“Your State and the FCT have a shared obligation to ensure that the expenditure and repayment schedules of Chinese loans, liabilities, facilities and other foreign borrowings are in accordance with national and international standards and to prevent or reduce the risk of seizure of Nigerian assets abroad.
“We would be grateful if the recommended actions were taken within 7 days of receipt and/or publication of this letter.
“If we have not heard from you by then, SERAP will consider appropriate legal action to compel your government and the FCT to comply with our request in the public interest.”
