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No evidence China has ‘vowed’ to take over Nigeria’s assets over unpaid loans

“China vows to take over Nigeria’s main assets over unpaid Loans,” reads the headline of an article on African Stand and posted on Facebook.

But nowhere in the article does it give evidence for or even mention the claim that China has “vowed” to take over Nigeria’s assets for unpaid loans. The headline is false.

The report – without naming China – warned that conditions placed on major loans were a threat to Nigeria’s sovereign assets,” the article states, but it does not the name the report it is citing. 


Buhari dismissed claim of Chinese debt trap

At the 2018 Forum for Africa-China Cooperation, President Muhammadu Buhari said Nigeria was not being trapped by Chinese loans and that the country’s relations with China align with his government’s economic recovery and growth plan. 

Buhari said that the Nigeria-China partnership led to the “execution of projects” valued at over $5 billion from 2015 to 2018. 

IMF warning

In April 2019, the International Monetary Fund did warn Nigeria to be wary of the terms of Chinese loans.

“Capital flows, which includes capital flows from China, are, of course, important for development. On the other hand, what is very important in lending arrangements are the terms of the loans and we urge countries to make sure that when they borrow from abroad, the terms are favourable.

“In particular, we recommend that loans to countries should conform with Paris Club arrangements and that is not always the case of loans from China,” Tobias Adrian, director of monetary and capital markets at the IMF, said. He spoke at the launch of the Global Financial Stability Report at the IMF-World Bank meeting in the US in April 2019.

The report gave no indication of Nigeria being at risk of losing its assets to China. 

"In relation to the Debt Management Strategy, the ratio of domestic to external debt stood at 68.49% to 31.51% at the end of March 2019. The total public debt to GDP Ratio was 19.03% which is within the 25% debt limit imposed by the government," Nigeria's debt management office wrote in a press statement on the country's public debt data on 10 July.

The most recent summary of Nigeria's external debt stock published by the Debt Management Office, shows that at the end of March 2019, Nigeria owed China about US$2.6 billion. – Allwell Okpi

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