Nigeria is not bothered about China’s decision to cut its lending to Africa for different reasons, amongst which is the fact that the continent’s most populous country is diversifying her sources of funding. This is according to the Debt Management Office (DMO).
BizWatch Nigeria understands that the world’s second-largest economy had last year (2021) indicated that over the next three years, it would cut the headline amount of money it supplies to Africa by a third to $40 billion, with more emphasis on Small Medium Entreprises, green projects and private investment flows rather than large infrastructures.
At the moment, Chinese banks make up about one-fifth of the total lending to Africa, concentrated in a few strategic/resource-rich countries, including Nigeria, Angola, Djibouti, Ethiopia, Kenya, Zambia, and Uganda.
But allaying the fears that emanated from the announcement from the Chinese government, Patience Oniha, director general of DMO, stated that Nigeria may not need to worry.
“If China doesn’t give us money, what happens?” the DMO boss queried, as she revealed that “the first part is that we are diversifying our sources of funding so we’re not dependent on just one source, whether in the external borrowing or domestic.”
“The second thing really is to say that the debt from China is probably about $3.6 trillion, and is just about 10 percent of our external debt; when you compare to the total debt, that’s probably at about three percent.
“Therefore, what I’m saying is: we like them, we can see the airports, we can see the rail, but really, they’re not the major source of our funding,” she added.
Nigeria’s public debt stock rose to N39.556 trillion or $95.779 billion as of December 31, 2021.
The total debt, which includes both external and domestic debts of the Federal Government, the 36 state governments, and the Federal Capital Territory (FCT), is N6.64 trillion higher than the N32.915 trillion or $86.392 billion on December 31, 2020.
