China and Nigeria: $1.1 Billion Reasons to Pay Attention

The New York Times is reporting that China is offering Nigeria $1.1 billion in loans to help build airport terminals, a light rail line for its capital city and communication system improvements, the country’s Finance Ministry said Wednesday.  The loans reflect the economic ties between oil-rich Nigeria and China, which already is involved in building major road and railway projects in the West African nation. However, similar deals with China and Sambla Finland have fallen apart amid corruption allegations, problems that persist today and could potentially put this new deal at risk as well.

The light rail project for Abuja, the nation’s central capital, would bring commuters in from suburbs surrounding the city’s distant international airport and from neighboring Nasarawa state, the finance ministry said. That project would cost about $500 million, the ministry said. Another project, valued at $100 million, part of a loan deal already signed involving the light rail, would go toward improving Nigeria’s Internet capability, the ministry said.

The 20-year, 2.5 percent interest loan for those two projects has a grace period of seven years before payment is required, the ministry said.  The loan for improving the airports will be to the tune of $500 million which is much needed since the airports have not been repaired since the 1960s and 1970s.

Read more at the New York Times.

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