Disclose details of Chinese loans, SERAP tells govs, Wike
The Socio-Economic Rights and Accountability Project has asked the 36 state governors and the Minister of the Federal Capital Territory, Nyesom Wike, to disclose details of any Chinese loans, liabilities, and other external borrowing obtained and guaranteed by the Federal Government.
In a statement on Sunday by its Deputy Director, Kolawole Oluwadare, the organisation also asked the governors to reveal the debt restructurings, terms and conditions for any such borrowing, including the provisions on collateral.
It also urged the governors to clarify any investment agreements with Chinese companies and repayment histories of any loans, liabilities and facilities obtained from China and other external creditors.
The statement read, “We are concerned that your state and the FCT may have failed to efficiently manage your debt obligations, especially your external debt and investment obligations, as guaranteed by the Federal Government.
“The failure to uphold your obligations is contrary to Section 6 of the Debt Management Office Establishment (Etc) Act and creates financial risks and other exposure to Nigeria with respect to these Chinese loans, liabilities and other external borrowing.
“These Chinese loans, liabilities, and other external borrowing by your state and the FCT may not have been used for the purposes for which they have been obtained, as well as the terms and conditions guaranteed by the federal government.
“SERAP is concerned that there is a significant risk of defaults of the Chinese loans, liabilities, and other external borrowing by your state and the FCT, which are guaranteed by the Federal Government.
“There are also significant risks of confiscation of Nigerian assets in foreign jurisdictions by multilateral and bilateral agencies and other creditors in cases of failure by your state and the FCT to satisfactorily observe and fulfil the terms and conditions of the Chinese loans, liabilities and other external borrowing which are guaranteed by the Federal Government.”
SERAP said the non-accountability mechanisms for the Chinese loans and other external borrowing may also expose Nigeria’s assets in foreign jurisdictions to confiscation.
It, however, issued a seven-day ultimatum to the governors to disclose the spending details of the Chinese loans, investment obligations and external borrowing or risk a court action.
The statement added, “The apparent inadequacy of safeguards and accountability mechanisms for these Chinese loans, liabilities and other external borrowing may also expose Nigeria’s assets in foreign jurisdictions to confiscation.
“Your state and the FCT have a shared obligation to ensure that the spending and repayment plans of Chinese loans, liabilities, facilities and other external borrowing are consistent with the provisions of national and international standards and to prevent or mitigate risks of confiscation of Nigerian assets abroad.
“We would be grateful if the recommended measures are taken within seven days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall consider appropriate legal actions to compel your government and the FCT to comply with our request in the public interest.
“Despite several external loans, liabilities, investment obligations and external borrowing obtained by your state and the FCT, which are guaranteed by the Federal Government over many years, millions of Nigerians in your state and the FCT continue to lack access to regular electricity supply and have been denied the benefit of renewable energy solutions.
“SERAP is seriously concerned that many of the country’s 36 states and FCT are allegedly mismanaging public funds which may include Chinese loans, liabilities and other external borrowing obtained from bilateral and multilateral institutions and agencies and guaranteed by the Federal Government.”
