China Speaks on Debt Crisis in Nigeria, Other African Countries as Data Shows Amount Owed

• The Chinese government has assured Nigeria and other African countries that it would not create any debt crisis on the continent
• The Chinese envoy to Nigeria said the country would not threaten sanction against any country due to indebtedness
• Nigeria reportedly owes China about $4.3 billion in bilateral loans as of June 30, 2023

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The Chinese government has said it is collaborating with African countries to reduce poverty on the continent and pledged that it would not create a debt crisis for the countries in Africa.

Yan Yuquing, the Chinese Consul-General in Lagos, disclosed this at the 18th China-African lecture on Thursday, November 16, 2023, at the Faculty of Arts at the University of Lagos.

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China promises not to threaten Nigeria on debt default

The Chinese envoy said the collaboration between China and African countries aimed to reduce the continent's poverty.

She revealed that the Asian country has never created a debt crisis in any African country, stating that it collaborates to help the continent deal with its challenges.

The envoy said China has contributed more than 60% in debt repayment delays under the G20 framework.

She said the Chinese government would never threaten to sanction any country regarding contracts between the two countries.

She said:

"The people of Nigeria and China are wonderful, hard-working, and friendly. We have very good results in several fields, such as infrastructure, trade and investment, education, and culture. These are essential parts of our bilateral relationship."

The Dean of the Faculty of Arts, Prof. Akanbi Ilupeju, said the meeting was for the benefit and possibilities of cross-fertilising ideas in relevant areas of sciences, social sciences, and humanities in general.

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"It is also to benefit our students on exchange and the possibility of having them pursue their programmes in China," he added.

Nigeria's indebtedness to China hits $4.3 billion

Data from the Debt Management Office (DMO) earlier revealed that Nigeria was indebted to the Asian country to $4.3 billion.

The DMO data revealed that as of March 31, 2020, the total borrowing by Nigeria from China was $3.121 billion (₦1,126.68 billion at ₦361 per dollar).

This amount represented only 3.94% of Nigeria's total public debt of $79.303 billion (₦28,628.49 billion at ₦361 per dollar) as of March 31, 2020.

Similarly, in terms of external sources of funds, loans from China accounted for 11.28% of the external debt stock of $27.67 billion on the same date.

Nigeria's public debt balloons to N87 trillion

The data show that China was a small funding source for the Nigerian government.

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Nigeria's public debt exceeded N87 trillion on hills of massive borrowings from the Central Bank of Nigeria (CBN).

The bank's Ways and Means Advances to the Nigerian government is reportedly estimated at N22 trillion as of June 30, 2023.

The list of African countries with highest debt to China, amount and what the debts are used for

Legit.ng reported that Africa’s debt to China surpassed $140 billion as of September 2021.

However, IMF says about $285 billion would be required by African countries to finance major infrastructural projects from 2021-2025.

China has become a top global lender with great stakes that exceeds more than five per cent of global GDP.

Source: Legit.ng