Following the withdrawal of another Chinese lender from the Kaduna-to-Kano rail project in 2020, the Nigerian Senate has accepted China Development Bank to serve as the country’s new financier for the project, which would cost $973 million. Before the bank withdrew, Parliament had approved China’s Exim Bank to provide financing for the rail project, which was included in the government’s intention to borrow $22.8 billion from abroad.
Meanwhile, the new financier, who will provide a 2.7% interest loan to the train project over a 15-year period, has received approval from Nigeria’s lower house of parliament. In order to encourage agricultural and other non-oil industries and reduce reliance on oil, President Muhammadu Buhari made these improvements to Nigeria’s transportation infrastructure and aging electricity networks the foundation of his administration.
Many billions of dollars in project-related loans from Chinese and other foreign lenders have been approved by Nigeria’s parliament; however, the money has not yet arrived. After delays from Chinese lenders, Nigeria turned to Standard Chartered Bank (STAN.L) in 2022 for a loan to construct the Kano-to-Maradi line, which will connect the northern states of Kano, Jigawa, and Katsina. Yet in order to secure money, the government has now turned to China.
In Africa’s largest country, Nigeria, where 40% of the population lives below the poverty line, weak transport and electrical infrastructure has hindered economic expansion for decades. President-elect Bola Tinubu, who has pledged to address a long list of issues, including double-digit inflation and large-scale oil theft, will take office in May when Buhari leaves office.