The Minister for Transportation Rotimi Amaechi has said that the loans taken by the government from China for the construction of rail projects will be paid back in 20 years’ time.
In a statement he made on Saturday, August 1, 2020, Amaechi disclosed that China was the only nation giving out loans with a low-interest rate of 2.8 percent.
According to Amaechi, no country would give out a loan without a guarantee to pay back such loans.
The trade agreement between Nigeria and China, the ministry of transportation does not 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 says is, 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 of the 500million dollars loan, we have paid 96 million dollars already, Nigeria is already paying.
And the 500 million dollars was not taken 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 per cent, which country will give you that loan? Secondly, these loans are not given 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.”
The minister said that the government needed the loans to boost infrastructure in the country, adding that in the case of a default, only the assets constructed with such a loan would be taken back.
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 I am not able to pay and you come to collect the items we have agreed upon, that these are the 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.”
