Transport minister insists Nigerian has capacity to pay back Loan in 20 years at 2.8% interest
Minister of Transportation, Rt. Hon.Chibuike Rotimi Amaechi has reiterated that the Nigerian government has the capability to pay back the loans collected for the construction of rail projects within the stipulated period of twenty years, while noting that Chinese loans offers the best terms and conditions.
Amaechi stated this when he appeared on a live television programme (Democracy Today) aired on AIT in Abuja, Friday.
He said China was the only country given out loans with a low interest rate of 2.8 percent as no country in the world would give out a loan without a guarantee to pay back such loans.
“The trade agreement between Nigeria and China: The first thing is that the ministry of transport doesn’t take loan, everything about loan is directed to the ministry of finance, so I couldn’t have signed any loan because I don’t take loan. What I signed is what is called commercial contract, which is contract between the federal government and CCECC as a contractor, the contract between Nigeria and China is usually signed by the ministry of finance.
“Whether is the ministry of finance that signed it or the ministry of transportation, the issue is that nobody will give you loan free of charge , there must be an agreement and such agreement must contain some terms, that doesn’t mean that you are signing away the sovereignty of the country, no country will sign out its sovereignty.
“What clause 8 does is to say to you, I expect you to pay according to those terms we have agreed, if you don’t pay, don’t throw your immunity on me when I come to collect back the guarantee that was put forward, that is all.
“We are paying the loans. In the same National Assembly sitting, they were told that the 500million dollars loan, we have paid 96 million dollars already, Nigeria is already paying and the 500 million dollars was not taking by us, it was taken by President Goodluck Jonathan in his term and that clause was there.
“Nigeria has the capacity to pay back for the period of 20 years at 2.8 percent, which country will give you that loan? secondly , these loans are not giving to us, they are paid directly to the contractors, once they sign that the job has been done , they pay the contractors and that has never happened before and this project are in place, are they trying to rubbish the fact that there is a railway from Abuja-Kaduna?
“There is no loan in Nigeria either internal or external that is not approved by the National Assembly, none. Chinese government will not even give you a loan without an approval by the National Assembly because if they give you a loan without the approval from NASS that is no loan,” he explained.
Reacting to fears by Nigerians that the country is being sold out to China because of the loans, Amaechi said ” when we stop collecting the loans, then we stop developing because there was no money by the time we came into government, by the time we came the money has been blown away”, he said.
Amaechi further said that the sovereign guarantee and sovereign immunity clause raised by the National Assembly was just a term used to ensure that loans collected were paid back and in the case of a default only the assets constructed with such a loan would be taken back.
According to him, even commercial banks would not give anybody a loan without an asset that can be used to pay back the loan collected, same with the Chinese loan or any other loan in the world.
Hear him, “What you do is you give a sovereign guarantee and that guarantee is the immunity clause they are talking about. When we say I give you a sovereign guarantee and we get immunity clause, the immunity clause is that if tomorrow am not able to pay you and you come to collect the items that we have agreed upon, that these are items that am putting down as guarantee, I can waive my immunity and say no you can’t touch it am sovereign country.
” So, they are saying if you are not able to pay, don’t stop us from taking back those items that will make us recover our funds, so is China our father that will give us money for free? It is a standard clause in every agreement whether is America we signed it with, whether is Britain, any country would want to know that they can recover their money.
“Anybody that is saying he doesn’t know what a sovereign guarantee or immunity is, too bad for the person, because it simply means in trade that I am not giving you this loan free of charge, just like you go to the bank to collect a loan, the moment you don’t pay they go after your assets you put down, that is all about the clause, the Chinese can never come and take over Aso rock and become President or Minister.
” And if the assets you put down become depreciated then you negotiate which assets they can go after. Chinese will never take over what was not constructed with the loan.”
Amaechi said it would be unconstitutional to take a loan not approved by the National Assembly, but for the issue of confidentiality in government he would have published the clauses generating the dusts.
“The National Assembly are aware of all these loans, we can’t take loan without the National Assembly, so ask why they are investigating? The Chinese is just asking us to show them the evidence that we will pay back which is the immunity clause. If we don’t pay, they can take back their assets,” he noted.
Speaking about the Zambia experience, where the country could not meet up with its loan agreement, the minister said that the Chinese government will never take over infrastructure that was not constructed from the money taken.
He also acknowledged that the finance ministry in a payment plan had started paying back some of the loans collected.
“The payment plan is the responsibility of the ministry of finance, ours is to implement the contract. They are meeting the requirements, at any point in time that we need to pay, we’ll pay, adding, “1.6 billion dollars was taken to fix Lagos to Ibadan, we are asking for 5.3 billion dollars to fix from Ibadan to Kano, 3.2 billion dollars to fix Port Harcourt to Maiduguri, then Lagos to Calabar which is about 11.1billion dollars, if those things were done when we had money, will we be here today? The answer is no.”
Amaechi who also called on the National Assembly and Nigerians to appreciate government effort in providing infrastructure said the Itakpe /Warri rail project in the South South which was abandoned for thirty four years by successive governments was fully rehabilitated by the present administration without seeking for loan.
