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Fayose writes Chinese leader to stop $2bn loan

Fayose writes Chinese leader to stop $2bn loan
April 14
16:12 2016
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Ayodele Fayose, governor of Ekiti state, has written a letter to President Xi Jinping of China, seeking the stoppage of the $2 billion loan sought by the federal government.

In the letter dated April 12, Fayose said Nigerians were “totally opposed to increment of the country’s debt burden, which is already being serviced with 25 per cent of the government’s annual budget”.

He alleged that some of the projects which the loan was being sought were not captured in the 2016 budget.

Fayose said the Chinese government should consider assisting Nigeria in the area of technology transfer rather than granting the country “unnecessary loan”.

The letter read: “I write as one of the major stakeholders in the project Nigeria, and a governor of one of the federating units making up Nigeria, to draw your attention to report that the federal government of Nigeria is on the verge of obtaining a $2 billion loan from the Export-Import Bank of China.

“This $2 billion loan is part of the N1.84 trillion the federal government of Nigeria has proposed to borrow to finance the 2016 budget, which is yet to be signed by the President, Muhammadu Buhari owing to unending controversies between the executive and legislative arms of government.

“According to reports, Nigeria desires to raise about $5 billion abroad to cover part of its 2016 budget deficit. This is projected to hit N3 trillion ($15 billion) due to heavy infrastructure spending at a time when the slump in global oil prices has slashed the country’s export revenues.

“While conceding that all nations, especially developing ones need support to be able to grow because no nation is an island, I am constrained to inform you that if the future of Nigeria must be protected, the country does not need any loan at this time.

“The government of China should be mindful of the fact that Nigerians, irrespective of their political and religious affiliations are totally opposed to increment of the country’s debt burden, which is already being serviced with 25 per cent of the federal government’s annual budget.

“It will interest the government of China to know that some of the projects for which the loan is being sought are not captured in the controversial 2016 budget, which has been sent to the president by the national assembly for his assent. For instance, the Lagos-Calabar Rail project was not included in the budget proposal the president presented to the national assembly and it was not included in the appropriation bill passed by the national assembly.

“Most importantly, Nigeria is presently servicing debt with about 25 per cent of its annual budget and what will happen to the economy in 2017, when the country will begin to service the additional debt to be incurred this year is better imagined than experienced.

“The Chinese government must also be aware that some western nations approached by the federal government for loan diplomatically and cleverly declined.

“This must have been informed by the suspicion in the present government’s capacity to salvage the nation’s economy as well as the sincerity in the fight against corruption. More so that Nigeria’s foreign reserve, which is the only guarantee for foreign loan has declined to a very uncomfortable level.

“In my opinion, Nigeria needs the collaboration of the Government of China in the area of technology transfer, rather than granting loan that will be mismanaged under the guise of building infrastructure.

“It is also important for the Government of China to note that the federal government of Nigeria claimed to have recovered and still recovering trillions of naira allegedly looted from the treasury. For instance, over $200 billion is expected to be recovered from Dubai, the United Arab Emirate while N3 trillion was said to have been saved from the Treasury Single Account (TSA).

“The Federal Inland Revenue Service (FIRS) has also said that it will generate not less than N4.5 trillion this year. What then is the rationale behind the $2 billion loan from China?

“As a result of the government’s bad economic policies, the middle class has been eliminated, power supply is at its lowest ebb, petrol is not available and by the time fresh loans begin to pile up, 95 per cent of Nigerians will definitely be pauperised.

“Particularly, by the autocratic nature of our president, the federal government is not prepared to listen to wise counsel, hence the desperation to take unwarranted loans even if the future of Nigeria and its people will be mortgaged.

“I therefore appeal to Your Excellency to assist Nigeria and its people in the area of technology transfer so as to limit importation of goods and services, rather than granting the country unnecessary loan.

“In conclusion, I wish to state  that this letter and information became necessary for posterity sake and to put it on record that when the future of Nigeria and its people was going to be mortgaged through loan from the People’s Republic of China, I stood up to be counted in defence of our country.”

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