Nigerian Senate has approved China Development Bank as the new financier for Nigeria’s $973 million Kaduna to Kano rail project, after the withdrawal of another Chinese lender.
China Development Bank which is offering a 15-year loan at an interest rate of 2.7%, has also been approved by Nigeria’s House of Representatives.
The administration of President Muhammadu Buhari has prioritized upgrading Nigeria’s transportation infrastructure and old electricity grids to decrease dependence on reducing crude oil earnings.
Meanwhile, funding has been a major problem. Though Nigeria’s parliament has approved many loans from Chinese and other foreign lenders for capital projects, the funds have not yet materialized and Nigeria’s debt keeps growing.
After encountering delays from Chinese lenders, Nigeria applied for a loan from Standard Chartered Bank in 2022 to erect Kano-to-Maradi line, which connects the northern states of Kano, Jigawa, and Katsina.
The government has now approached China for financial support. In Nigeria, a country where 40% of the population lives below poverty line, poor transportation and electrical infrastructure have long obstructed economic growth.
When President-elect Bola Tinubu succeeds Buhari in May, he must fulfil his promise to tackle issues like double-digit inflation and large-scale oil theft.
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