- The United States government has sent a note of warning to President Bola Tinubu on dealing with China
- China, over the years, has enjoyed a good relationship with Nigeria and has provided various loans for infrastructural development
- Under the immediate past administration of Muhammadu Buhari, Nigeria's borrowing from China increased by over 200%
The United States government has asked Nigeria to be careful about its relationship with China.
The caution, contained in the Integrated Country Strategies document of the US Department of State, noted that China could influence the Nigerian government through the loans it provides to the country.
The warning comes after an increase in Nigeria's debt by over 237.31% during Muhammadu Buhari's tenure.
Data from Debt Management Office shows that as of March 2023, Nigeria owed China’s Exim Bank $4.34 billion compared to $1.28 billion debt as of March 2015.
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US government worries about Nigeria, China relationship
The Punch reports that the US document noted that the easy nature of the loans could give China more influence over the Nigerian government.
The document said:
"China gives money for various projects like building roads and bridges in Nigeria.
This money is called “sub-prime financing. This money is given to people or countries who can’t get regular loans and has higher interest rates. Nigeria needs to be careful.
The US document also discussed problems in Nigeria’s political and economic systems.
The document read:
"There is a fundamental problem in Nigeria rooted in decision-making driven by patronage in both political and economic decision-making.
"Nigeria has a problem, there is little to no coordination between relevant ministries and the civil service that does not sufficiently advise the Federal Government or sustain policy objectives over multiple administrations.
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"Political and economic elites advocate for policies that prioritize their immediate personal gains rather than the enduring stability and cohesion of the nation."
The document further expressed concerns that many Nigerian leaders are more concerned about seeking short-term personal gains rather than prioritising the nation's long-term economic growth.
Here is how much Nigeria owes other countries as of March 2023
- China (Exim Bank of China): $4.34 billion
- France (Agence Francaise Development): $593.75 million
- Japan (Japan International Cooperation Agency): $62.02 million
- India (Exim Bank of India): $26.64 million
- Germany (Kreditanstalt Fur Wiederaufbau): $144.75 million
Nigeria’s debt stock hits N82 trillion amid CBN's naira devaluation
Meanwhile, in another report, Legit.ng reported that Nigeria’s public debt has risen to N82 trillion from N77 trillion before the Central Bank of Nigeria (CBN) exchange rate unification, announced on Wednesday, June 14, 2023.
According to a press release by the CBN, all exchange rate windows are collapsed into the Importers and Exporters (I&E) window, showing a merger of the multiple exchange rates.
The unification has seen the naira fall to N664 per dollar and has attracted severe consequences for the nation’s economy, including a spike in public debt.