By John Okeke
The fears that Nigeria will cede its sovereignty to China due to accumulated debt through loans has been described as “Mischievous and lack of Understanding” by people .
It could be recalled that the House of Representatives on Tuesday raised alarm over lethal clauses in Article 8(1) of the commercial loan agreement signed between Nigeria and Export-Import Bank of China which allegedly “wills the sovereignty of Nigeria” in the $400 million loan for the Galaxy Backbone’s Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone (NICTIB) Phase 11 Project, signed in 2018.
Speaking in a telephone interview with the Director of the Center for China Studies of Nigeria , Charles Onunaiju said the revelations by House of Representatives members were blown out of proportion adding that the fears that china will take over sovereignty of Nigeria will not happen .
He explained that China can assume management of projects to recover its debt in the event where there is a defaulter of the agreement signed .
“I have seen that clause. First and foremost, sovereignty is inherent in a state. It is not ceded, it is not traded. I have read the clause, I know that particular clause in the agreement. The only thing about sovereignty is when the state dissolves completely, when the state becomes non existent then you talk about sovereignty. You can cede a war, maybe conquer a country completely and its sovereignty is destroyed, it is a different thing. So, frankly speaking, the whole thing seems to be blown out of proportion.
What I understand about that clause to mean, in case of default notwithstanding the sovereignty status of the state the creditor will have to explore ways to recoup its money, it is not even cede. The best thing they can do is assume management of such facility and recover their debt, they cannot carry such facility to their country, they can assume management with a view to recover their money, this is normal. In any case why will a country like Nigeria be looking forward to default ? First and foremost the idea of sovereignty compromise appears exaggerated. That clauses says irrespective of your sovereignty, China has a right to seek ways to retrieve because they cannot cede. For example, if they seize the railway, of what use is that to them ? The best they can do is to manage it more efficiently and recover their money. Are you seizing it so that you can take it to China ? The clause to my understanding and the spirit in it is in case there is a default, despite your sovereignty China can assume management of such facility.
Just as people continue to make reference of the Kampoto Port in Sri Lanka which they claimed China assumed. The port was built with China loan and it wasn’t making a profit and the government said, instead of us to tax our citizens and use the money to pay, let Chinese company enter into equity share holding with us.
So what they did was that they brought in a Chinese company as management partner that retain 60% while Sri Lanka retain 40% to manage the port for a period of time under which the Chinese can recoup their money but it still remains your assets.
The first railway that was built by China in Africa between 1969 and 1974 was is about more than a thousand kilometre that railway has run aground, the two countries involved Zambia and Tanzania are asking China to come and resuscitate the railway and manage it. It was the first ever biggest project Chinese undertook in Africa and that was when China itself is weak and poor yet it agreed to construct that railway because it has significance for anti apartheid struggle and anti colonial in east Africa. That railway was ran by the two countries and they ran it aground.
If we default and I do not think, like most of these loans are tied to specific projects, projects that are commercially viable, projects that are life saving, projects that will improve our economic profile, projects that inject more economic activities into our national economy, projects that create jobs that transfer expertise and technology, it is not just a loan like the one we got for COVID-19 N3.4billion and for which now nobody can trace that money what it went for, that IMF loan on COVID-19, nobody can trace what it is being used for except for these protocols they are asking people just to give justification and nobody can trace and at the end of the day we have N3.8billion dollar debt to World Bank and nothing tangible, nothing concrete.
But this is a Chinese loans that are tied to specific projects, projects that brings value to our economic development, giving concrete value to the economy.”
“While the whole idea of Nigeria sovereignty being ceded on account of Chinese loan it is either mischief or lack of understanding . That clause simply implied that should Nigeria default, the Chinese can manage that particular facility with a view of recouping their money. That facility will not be taken to China, they will not seize it and keep it because seizing and keeping it does not help; just like I have given an example with the case of Sri Lanka,” he said.
He continued ,” China itself modernise on account of loans from Japan, between 1983 and up till 1993 China received over 100billion dollars grant from Japan to modernise their economy. In fact China was giving natural resources oil and coal in exchange of key projects built by Japanese, railway, steel mills, coal port.
So , these are not strange things, our people just don’t want to seek context to these things, they have decided to sensationalised it, people have not invested time to find out what these things are to read it more thoroughly.
First and foremost like I said sovereignty is never ceded. Sovereignty is an inherent character of a state, so it is not traded, I don’t see how Nigeria sovereignty is under threat; there are other ways Nigeria sovereignty can be threatened order than China loan.
On the other hand just like the minister of transportation said, he said if anybody has a better idea where we can get money to build this indispensable infrastructure except you want Nigeria to dissolve into anonym except we want this money changing hands except we want that to continue but if we want to rebuild the economy, if we want to grow a performing and integrated economy, infrastructure stabilisation is indispensable and how do we fund it.
Anybody who had a better idea where Nigeria can source funds either concessional loans or grants to fund this very indispensable infrastructure that we need to rebuild the economy, let him offer, we are willing to take that.
But if people have no option let it not become denigrating Chinese concessional loans which has low interest rate sometimes as low as 1% with long repayment period of about 30years, anybody who has alternative to where we can get better terms to fund our infrastructure which everybody believes is key to economic recovery, please we would be glad to have such options.”
He added,” the Nigerian sovereignty is not under threat by anybody at least not by Chinese concessional loans, I can say that authoritatively. The question of China colonialism of Nigeria is simply a blackmail. They have never been China colonialism and there will never be China colonialism.”
Also, speaking in an interview with Sheriff Ibrahim , in the Department of International Relations, University of Abuja , he said there is no fear ceding Nigeria’s sovereignty to China adding that the only fear is with Nigerian politicians stealing the borrowed money .
“First of all , I will say it is not possible based of the pact we have on ground having looked at the realities that envisage international economic relations as well as politics.
First of all sovereignty, when it comes to financial sovereignty, is the ability of an entity to actually exist on its own without necessarily putting into jeopardy the entity it calls its own which is the state. On the other hand, it should be able to finance its budget, its administrative expenses and other miscellaneous things that are attached to finances.But the fear for Nigeria is that any money collected in cash or in kind from China, we have senators, we have members house of representatives, we have other executives that siphon and steal this particular money.”
