Governor Fayose writes to Chinese government asking for the stoppage of the $2 Billion trade loan

Governor Ayodele Fayose of Ekiti State has written to the Chinese government seeking the stoppage of the proposed $2Billion trade loan it has promised to the Nigerian authorities.

The governor warned the Chinese government to be mindful of the fact that Nigerians not minding their political and religious differences are completely opposed to more debts to the Nation as its current dept already gulps a 25% of the federal government’s annual budget. He wrote that “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% of the Federal Government annual budget.”

The governor explained further that some of the projects which the loan is sorted for are not captured in the 2016 national budget.

A part of the letter reads: “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 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.

“Therefore, like the foreign aid that is reportedly being mismanaged, whatever loan that is granted to the Federal Government of Nigeria by the Chinese Government may be mismanaged too.”

 “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).

What is your view about the governor's position? Do you think he has the legal and moral justification to go write to the Chinese government on this reason?