- Nigeria is among African countries considered to have high debt exposure to China
- As of March 2023, Nigeria's debt to China was about $3.27 billion, while China recently rejected a loan request from the country
- Chinese lenders account for 12% of Africa's debt, with many fearing that the Asian country has trapped African countries
A new report has ranked Nigeria fifth on the list of African countries with the highest debt exposure to China.
A Punch report says the Nigerian government borrowed about $3.27 billion from five countries between June 2015 and September 2022.
Nigeria is indebted to about five countries
Data from the Debt Management Office (DMO) reveals that within the period, Nigeria's borrowings from five countries increased by 206.96% from $1.58 billion in June 2015 to $4.85 billion by September 2022.
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The five countries include China, France, Japan, India, and Germany.
In June 2015, Nigeria borrowed $1.39bn from China's Exim Bank of China, $140.25m from France's Agence Francaise Development, $43.10m from Japan's Japan International Cooperation Agency, and $11.73m from Germany's Kreditanstalt Fur Wiederaufbua.
As of September 2022, Nigeria's bilateral debt to China rose to $4.09 billion.
Nigeria's debt to China signposts Africa's battle to service and possibly offset its debt to the Asian country.
China is Africa's biggest lender
China's debt across African countries has been a hotly debated topic regarding global economics to the extent that the US Treasury Secretary, Janet Yellen, said in January 2023, during her visit to Africa, that China is setting a trap for African countries.
China replied that it placed no debt traps for Africa and finally agreed to cancel some debts and restructure others.
The COVID-19 pandemic's effect on economies across Africa and Russia's brutal invasion of Ukraine has crippled the ability of many African countries to pay their debts.
About 22 low-income African countries are either going through a debt crisis or on the verge of it.
BusinessInsider reports that China accounts for 12% of Africa's private, public, and external debts, amounting to $696 billion from 2000 to 2020. The Asian country is a significant lender to many African countries.
Analysts believe the country's lending to Africa has reduced in recent years.
In 2023, China is expected to slow lending to many countries, including Nigeria, whose $22 billion loan request from China was rejected recently.
African countries at risk of the debt crisis
Many African countries are in dire straights and in dire need of Chinese bailouts to deliver critical and broader social and infrastructural improvements for their burgeoning population.
The World Bank identified about seven African countries as having a financial crisis or in danger of debt distress as of 2020 due to high exposure to Chinese loans.
According to research by Chatham House in 2022, about 20 recipients of Chinese loans are in Africa.
Top African countries with high debt exposure to China
- Democratic Republic of Congo
- Cote d'Ivoire
China rejects Nigeria's $22bn loan request, FG to go back as Reps approve counter-request
Legit.ng reported that the House of Representatives approved a counter request for a loan of $973,474,971.38 ($973 million) after the Federal Government's request for a $22.7 billion loan from China Development Bank was rejected.
The rejected loan was intended to fund the Nigerian Railway Modernisation Project's Kaduna-Kano segment.
However, due to concerns about Nigeria's ability to repay the loan and the impact of the COVID-19 pandemic on the project, China Exim Bank withdrew its support.