Chinese loans

OUR polity has been over-heated by the seemingly endless debates on the issue of loans given or about to be given to Nigeria by the government of China for our infrastructural development.

Pundits have criticised or condemned the terms of the Chinese loans granted for railway construction and modernisation.  The outcries came after a committee of the House of Representatives, while investigating our foreign loans, claimed that Nigeria’s sovereignty is being undermined as part of the terms for China’s infrastructural loans to Nigeria.

Minister of Transportation, Chibuike Rotimi Amaechi, who attended a recent House of Representatives public hearing, tried vigorously to explain the sovereignty waiver clause in the loan agreement and clear the misconception of Nigeria handing over its sovereignty to China.

We understand the quantum of emotion involving this issue. Unfortunately, we have allowed emotion to becloud the truth and reason. Nations all over the world borrow from each other. Countries borrow irrespective of how wealthy they are perceived to be. The United States of America, for instance, is rated as the richest country in the world.

But it has a national debt of $24.95 trillion as of May 1, 2020, the highest external debt stock in the world. There’s hardly any nation without external indebtedness.

The hullabaloo about the terms of the Chinese loans is indeed unwarranted. Waiving of sovereignty or providing sovereign guarantees for loans is a standard clause in this type of foreign borrowing. It does not mean Nigerian sovereignty has been mortgaged.

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Nigerians must understand the difference between international diplomatic immunity, which has to do with a nation’s sovereignty and independent existence, and commercial immunity, which has to do with a nation’s commitment to ensure the repayment of foreign loans it takes.

The “sovereign immunity” Nigeria waived does not tamper with our country’s sovereignty and independence. It is a mere routine commercial immunity waiver. Concessions relating to immunity for the purpose of provision of commercial guarantees are normal traditional rituals in loan agreements between sovereign countries.

It is on account of that, for example, that you see Nigeria signing an agreement with other institutions or nations and agreeing to a choice of territorial jurisdiction for the purpose of determining disputes if they arise.

That is how you see Nigeria submitting to jurisdiction for the determination of trade disputes in UK, Paris or other international destinations.

A sovereignty waiver relating to loans between nations is nothing but a guarantee or commitment to repay the loan. It is restricted to specific assets and has nothing to do with loss of independence to another nation.

Nobody can recolonise Nigeria because of loan. No political leader has the power or capacity to cede Nigeria’s political sovereignty to another nation. That is impossible.

VANGUARD

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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.