China is offering Nigeria US$1.1 billion in loans to help the West African nation build airport terminals, a light rail line for its capital city and communication system improvements, the country’s Finance Ministry said on Wednesday.
The loans reflect the deepening economic ties between oil-rich Nigeria and China, which already is involved in building major road and railway projects in the nation. However, similar deals with China have fallen apart amid corruption allegations, problems that persist today and could potentially put this new deal at risk as well.
The light rail project for Abuja, the nation’s central capital, would bring commuters in from suburbs surrounding the city’s distant international airport and from neighbouring Nasarawa state, the finance ministry said. That project would cost about US$500 million, the ministry said. Another project, valued at US$100 million, part of a loan deal already signed involving the light rail, would go toward improving Nigeria’s internet capability, the ministry said.
The 20-year, 2.5 per cent interest loan for those two projects has a grace period of seven years before payment is required, the ministry said.
Separately, another US$500 million loan will go towards building airport terminals in Abuja, Enugu, Kano and Port Harcourt, the statement read. Airports in Nigeria, Africa’s most populous nation with more than 160 million people, largely sit in disrepair as most were built in the 1960s and 1970s.
Chinese diplomatic officials in Nigeria could not be immediately reached for comment on Wednesday.
