Nigeria defaults in debt repayment to China, penalties stand at N41. 31bn

Nigeria has failed to service its debt to China which has accumulated to N110.31 billion in the last two years. According to report by the Debt Management Office (DMO), the China debt stock included the principal and repayment charges. DMO said that from January 2021 to December 2022, the principal fee stood at N69, 009,417,500 ($153.85million), while the interest charges amounted to the sum of N41, 311,455,000 ($92.1million). The debts were incurred for the completion of the Nigeria Railway Modernisation Project (Idu-Kaduna Section), the Nigeria Railway Modernisation Project (Lagos-Ibadan Section) and the Nigeria Abuja Light Rail Project.

A breakdown of the data showed that in 2021, Idu-Kaduna Section’s principal fee was $ 38.46 million (N17.25bn) while interest earmarked is $ 9.5 million (N4.26bn). The Lagos-Ibadan Section’s principal was not noted, but the interest stood at $ 24.07 million (N10.80bn). During the period, the Abuja Light Rail Project had its principal fee at $ 38.46 million (N17.25bn), while the interest rate accumulated to $11.45 million (N5.14bn). As at 2022, the principal on Idu-Kaduna Section was $38.46 million (N17.25bn), while the interest fee was $8.52 million (N3.82bn). The Lagos-Ibadan Section interest fee stood the highest at $ 28.06 million (N12.59bn) with the principal amount not indicated. The Abuja Light Rail Project principal was $38.46 million (N17.25bn), with accumulated interest charges of $10.48 million (N4.70bn).

The Nigeria Railway Corporation (NRC) has been able to generate the sum N11, 606,737,070 in two years despite not being able to service its N41.31bn debt. The National Bureau of Statistics (NBS) said  the sector realized N5,570,998,908 as revenue which fell by N464,739,254 compared to the N6,035,738,162 generated in 2021. In 2021, railway services generated revenue of N5, 697,512,095 from passengers, with goods realizing the sum of N299, 805,884 and other income receipts earmarked N38,420,183. However, 2022 revenue indicated that N4,546,342,056 came from passengers, N416,856,190 was realized from goods and N607,800,662 was generated from other income. This indicated that while revenue generated from passengers fell in 2022, the goods and other income increased in productivity. The NRC had earlier disclosed that Insecurity is impeding the growth of rail services in Nigeria.