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The United States has said the Nigerian government is at risk of being influenced by China due to the loans granted to the West African giants by the Chinese government.
This was contained in the revised Integrated Country Strategies (ICS) document by the US Department of State.
The document had earlier been approved on April 6, 2022, but was reviewed and updated on June 23, 2023, The Punch reports.
The content of the document in question stated that China offered subprime financing for various infrastructure projects in the country.
The U.S. noted that such loans have the potential to unnecessarily add to Nigeria's debt burden and ultimately increase Chinese influence over the Nigerian government.
A subprime loan is described as a loan offered to a borrower with a tarnished or limited credit history, thus such a loan is subject to higher-than-average interest rates.
The document partly read, “Meanwhile, China offers sub-prime financing for a range of infrastructure projects, with the potential to add unnecessarily to Nigeria’s debt burden and increase Chinese influence over the Nigerian government.”
Nigeria is currently indebted to the Exim Bank of China to the tune of $4.34bn as of March 2023.
It's important to note that China's state-owned company, Chinese Civil Engineering Construction Corporation (CCECC), handles the majority of Nigeria's railway projects worth over $25.51bn (₦10.5tn).
This was corroborated by a report titled ‘Nigeria Rail: Near-term focus on Northern region with long-term upside for Southern projects,’ released by the United States-based Fitch Solutions.
The reports noted that Chinese financing had enabled CCECC to handle most rail projects in the country.
“China Civil Engineering Construction Corporation has dominated the railway construction sector in Nigeria, supported by Chinese financing,” it read in part.