News / Africa

Not All Nigerians Sold on Chinese Loan

President of China Hu Jintao looks on as President of Nigeria Goodluck Jonathan speak during the family photograph of the 2012 Nuclear Security Summit in Seoul, March 27, 2012.
President of China Hu Jintao looks on as President of Nigeria Goodluck Jonathan speak during the family photograph of the 2012 Nuclear Security Summit in Seoul, March 27, 2012.
Heather Murdock
Nigerian officials say a new $1.1 billion loan from China will finance infrastructure projects like a railway and a new airport terminal that could kick-start the economy and ease the nation's security crisis.  But some Nigerians are skeptical, saying the loan may just buy opportunities for Chinese businesses from corrupt Nigerian officials.

The loan is called "concessional credit" because of the advantageous terms.  The 2.5 percent interest rate is very low compared to local bank loans, and Nigeria has 20 years to pay it back.

The government says the money will be used to develop the transportation industry with favored projects including a light-rail system in the capital and a new airport terminal in Lagos - Nigeria’s financial center and one of the fastest growing cities in the world.

Skeptical activists

Activists Opeyemi Agbaje, a 29-year-old activist, says if Nigeria’s dilapidated transportation system gets fixed it would be the first step toward ending widespread abject poverty and security crises that have plagued Nigeria for decades.

“Goods will move faster.  I can say I’m going to the market and bring my goods and [then] take it to another place.  It goes there immediately.  The inflation gets reduced.  It affects the economy.  Development gets higher.  Agricultural product moves from one place to another place," said Agbaje.

Agbaje says the loan is not a gift at all, but a business deal.  He expects China will parlay the loan into deepening its presence in Nigeria with the apparent intent to extract raw materials and sell goods in the marketplaces. Nigeria has plenty of raw materials to sell, he adds, and lots of shoppers.

In a village outside of the capital, Orison Frederick, a recent college graduate, stands on a dirt road near a 3-meter-high trash pile.  He says Chinese development is popular among Nigerians because they bring technology, while other countries just bring cash.

"They like selling their ideas in an easy way.  They want others to improve just like them improving also," he said.

Other Nigerians are not as optimistic.  Bukhari Bello Jega, director of research for the Center for Political Research, Education and Development, says Nigeria has been getting loans to build the transport sector for years and nothing has happened.

Half the funds are used for trumped-up bills, he says, and corrupt officials steal the rest.

“At the end of the day it only serves the interest of the bureaucrat, the elite in power and what have you.  Because those are the people that go to bargain for the country," he said.

Corruption

Jega says corruption in Africa makes China’s increasing presence on the continent dangerous for everyday people.  The worst-case scenario, he says, is that China ends up with control of Africa’s natural resources and markets while lining the pockets of the already rich and powerful. 

But, he says, the alternative isn’t much better.  Western aid often seems like colonialism disguised as altruism, he says, with human rights and governance conditions that aren’t always logical on the ground. 

Chinese companies can be seen across the continent building roads, schools, hospitals and government buildings, including the new African Union headquarters in Ethiopia.  Jega says Chinese aid comes “with no strings attached.”

"China is building a lot of infrastructure for Africa for free in exchange for raw materials.  And in an economic sense, for African leaders it’s easier for them to give China access to their raw materials in exchange for infrastructure development," he said.

Jega says he wonders how the increasingly strong relationship between African countries and China will ultimately impact international relations between the U.S. and China, with both nations having an enormous appetite for raw materials.  That tension, he adds, could ultimately result in a "battle for the soul of Africa."

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