Lawmakers Approve Change of Lender for $17bn Railway Modernisation Amid Opposition

Udora Orizu in Abuja

The House of Representatives at plenary yesterday, approved the change of financier from China Exim Bank to China Development Bank for the Nigerian Railway ModerniSation Project (Kaduna–Kano segment), despite opposition.

The Senate and House of Representatives had on March 5, 2020 and June 2, 2020 respectively approved the $22.7 billion External Borrowing (Rolling) Plan.

The lawmakers also approved relevant conditions provided in the harmonised term sheet which included that the loan type would be commercial, it would have maturity of 15 years, interest rate of 2.7 per cent, commitment fee of 0.4 per cent and upfront fee of 0.5 per cent.

The approvals followed the adoption of a motion moved by the Chairman Rules and Business, Hon. Hassan Fulata (APC, Jigawa) for the modification of the $22.7 billion 2016–2018 Federal Government External Borrowing (Rolling) Plan.

Moving the motion, Fulata disclosed that China Development Bank had been approved as the financier to fund the project with $17 billion following the withdrawal of China Exim Bank due to the impact of COVID-19.

He said the House was aware of the Communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal.

Fulata said, “Recalls that the National Assembly approved the sum of $22,798,446,773 under the 2016–2018 Medium Term External Borrowing (Rolling) plan. Aware of the Communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna–Kano segment) occasioned by the COVID–19 Pandemic whereof China Exim Bank withdrew its support to finance the project.

“Also aware that to secure funds for the project, the Contractor (CCECC Nigeria Limited) in collaboration with the Federal Ministry of Transportation engaged China Development Bank (CDB) as the new financier in the sum of $973,474,971.38 only.”

But, Hon. Ossai Nicholas Ossai (PDP, Delta) opposed the motion, saying that the lawmakers should be given copies of the new agreement before the loan would be approved.

Ossai said, “We are changing from China Exim Bank to China Development bank that means addition of another agreement. If we are going to pass that resolution, that means the members of this house won’t see that agreement.

“The Minister of Finance should come with the agreement agreed with the Development Bank of China so that members can be guided when approving such a loan.”

Reacting, the Speaker Hon. Femi Gbajabiamila asked him if he could talk to the Chairman, Aides and Loans about that

Responding, Ossai said he has done that and as well written to Ministry of Finance.

Ruling, Gbajabiamila after putting the motion to a voice vote and it was passed, directed the Chairmen of Aides and Loans and Land Transport to see him in his office after plenary to address the concern raised by Ossai.