DMO Rejects NGO’s Claim Of Nigeria Defaulting On Loan From China

The Debt Management Office (DMO) rejected the claim made by a non-governmental organization, Socio-Economic Rights and Accountability, that Nigeria defaulted on Chinese loans.

DMO issued a statement on Monday, saying that the claim is not true.

"Nigeria is fully committed to housing its debt obligations and has not defaulted on any of its debt service obligations," the DMO said, NaijaTimes reported.

According to the NGO, "Nigeria has failed to repay loans for which penalties stand at N41.31 billion."

The claim was made after Federal High Court in Abuja issued an order to President Muhammadu Buhari to explain how the $460 million Chinese loan was utilized to fund the failed Abuja Closed-Circuit Television project.

Justice Emeka Nwite said in his judgment that "there is a reasonable cause of action against the government," Punch reported.

The court asked the president to reveal the total amount spent on the companies and contractors alongside their details, revealing their identities. Furthermore, the court also demanded the ongoing status of the project.

"An order of mandamus is hereby made directing and compelling the government [through the Minister of Finance] to provide the details clarifying whether the sum of N1.5 billion mobilization fee reportedly paid to the contractors for the construction of the Headquarters of the Code of Conduct Bureau in Abuja was part of another loan from China," Justice Nwite said.

The judgment was given after SERAP (Socio-Economic Rights And Accountability Project) filed a suit against the government regarding the Chinese loans.

SERAP deputy director Kolawole Oluwadare said he commends Justice Nwite "for his courage and wisdom" following the judgment.

"This is a victory for justice, rule of law, transparency and accountability," he continued. "The judgment shows the way forward in the fight against corruption and impunity of perpetrators. We will do everything within the law to ensure full compliance by President Buhari with this ground-breaking judgment on Chinese loans."

Oluwadare urged President Buhari to make details public of Chinese loans alongside other loans that the government obtained since May 2015.

The total borrowing by Nigeria from China was US $3.121 billion and this amount represents only 3.94 percent of Nigeria's Total Public Debt of US $79.303 billion, as per DMO's official website. In terms of external sources of funds, loans from China accounted for 11.28 percent of the External Debt Stock of US $27.67 billion.

According to the Nigerian government's 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the federal government will be spending 74.6 percent of potential revenue in 2023 to repay debt.