The House of Representatives has given its approval to Nigeria’s loan application to the China Development Bank, which will help finance the proposed N19.49 trillion budget for the fiscal year 2023. Over half of the funds for the budget will be borrowed, with N7.4 trillion in domestic borrowing and N1.8 trillion in foreign borrowing. Nigeria’s economic situation has been worsening due to high inflation rates, high-interest rates, fuel subsidies, and declining revenues and reserves, with 63% of the population (about 133 million people) living in poverty. Many of the poor face hunger due to rising food prices, which contribute to over half of Nigeria’s inflation.
The House of Representatives has also passed a motion titled ‘Rescission of the 2016–2018 Federal Government External Borrowing (Rolling) Plan,’ which calls for the rescission of the decision to approve the 2016–2018 Medium Term External Borrowing (Rolling) plan. The plan was approved by the Senate and the House of Representatives in March and June of 2020, respectively, and involved the sum of $22,798,446,773. However, the China Exim Bank withdrew its support to finance the Nigerian Railway Modernisation Project (Kaduna–Kano segment) due to the COVID-19 pandemic. To secure funds for the project, the contractor, CCECC Nigeria Limited, collaborated with the Federal Ministry of Transportation to engage the China Development Bank as a new financier in the amount of $973,474,971.38. The House approved the change of financier from China Exim Bank to China Development Bank and the harmonized term sheet, which includes terms such as loan type, maturity, currency, interest rate, commitment fee, and upfront fee.