China Ready to Lend More, No Talks on Debt Forgiveness — Nigerian Minister Clarifies

The Nigerian government confirms that China is prepared to offer more loans, but no discussions on debt forgiveness are underway. Learn more about the minister’s clarification on Nigeria-China financial relations.

The Federal Government of Nigeria says it is not negotiating with China for debt relief, but has indicated its willingness to lend Nigeria more money and invest more in the Nigerian economy.

Foreign Affairs Minister Yusuf Tuggah said this on Channels Television’s Sunday Politics show.

Nigeria has been making debt relief proposals to the UN General Assembly for several years, but these have not been acted upon.

At the 79th UN General Assembly (UNGA) recently held in New York, President Bola Tinubu, represented by Vice President Kashim Shettima, called for reforms to the international financial system “including comprehensive debt relief measures to ensure sustainable financing and enable development”.

In response to a question on whether any of the multilateral or bilateral loans received by Nigeria were released at this year’s UN General Assembly, the Foreign Affairs Minister said: “Under President Obasanjo, we have benefited from debt relief. It is not just something that happens, it is a process. It takes time, but you have to be there and present. And these things happen. It doesn’t happen overnight.

“The impact we felt in the last debt relief was not just at the UN General Assembly.”

According to the Debt Management Office (DMO), Nigeria’s external debt stood at 56 trillion naira ($42 billion) as of March 2024. Meanwhile, domestic debt was 65 trillion naira ($46.29).

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China is one of Nigeria’s lenders. Asked if Nigeria was in talks with the Chinese government over debt relief, Tinubu replied in the negative, given his recent meeting with Chinese President Xi Jinping.

Tager said: “No, it is not something we are discussing with China. And on the debt issue, look at Nigeria’s debt ratio. We are not one of the heavily indebted countries.

“When we talk about the debt of developing countries, Nigeria is not in such a precarious position. In fact, China is ready to lend more, China is ready to invest more in Nigeria in infrastructure development and other forms. The minister also said Nigeria will join BRICS+, an economic and political grouping. Time Force, which has nine members.

As of December 2004, Nigeria’s total debt was US$36 billion (equivalent to 4.8 trillion naira at an exchange rate of 134 naira per US dollar). Of the external debt at that time, $30.84 billion was borrowed from the Paris Club and other bilateral and multilateral loans.

The Paris Club is an association of licensed money lenders founded in 1956 and based in Paris, France. Nigeria borrowed funds for development projects from members of the group such as the UK, the US, France, Germany, Japan, the Netherlands and eight other countries. Some of the borrowed money dated well before Obasanjo’s tenure.

President Olusegun Obasanjo’s debt relief campaign in 2005 included $30.8 billion to $18 billion for Nigeria’s debt relief. As an exit strategy, Nigeria paid $12.4 billion to its Paris Club creditors, amounting to $6.3 billion in repayments and $6.1 billion in outstanding debt.