1. Announcement on the contract from Chinese government
Two vital transportation projects in Nigeria have received a major financial boost, following concessional loans from two Chinese owned banks. The agreement was signed between April 25 and 27 in Beijing during China’s 2019 Belt and Road Forum for International Cooperation. This event holds annually, and is in its second year. It has been described as China’s most important diplomatic event. Chinese President Xi Jimping has stressed that connectivity is vital to advancing the Belt and Road co-operation.
The announcement of this development was forwarded at a press briefing by China’s Commercial Consul, Consulate General of the People’s Republic of China in Lagos, Mr Liu Junsheng. The press event was in reference to the Belt and Road Forum held in Beijing last month. Mr Liu Junsheng identified the projects that have received the facilities, as the Lagos-Ibadan section of the Nigerian Railway Modernization Project extending to Lagos Port Complex at Apapa, and the Lekki deep seaport project, both in Lagos.
The railway modernization project is advancing rapidly under government determination
The Chinese banks granting the loans are Export-Import Bank of China and the China Development Bank. Both banks are committed to the tune of $1.902bn in project funds. China in recent times has been increasingly involved in project financing in African countries.
Breaking down the details, Mr Liu Junsheng reported that the ‘Nigerian Railway Modernization Project Addendum No.2 Lagos-Ibadan section was signed with a contract sum of $1.488bn, and Addendum No.2A for the extension to the Lagos port complex at Apapa with a contract sum of $94.07m, totaling $1.581bn.’
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2. Details of the co-operation projects between Nigeria and China
Of these total China’s Exim or Export-Import bank accounts for the larger 80.14% of the loan, equaling $1.267b for Addendum 2 and 2A, while, as per agreement, Nigeria’s Federal Government counterpart funded 19.86% equaling $314m. The Lagos-Lekki deep seaport project is another project that has received loan facilities from the Chinese bank consortium. Out of a projected cost of $1.05bn, China is responsible for providing $635m through China Development Bank, according to the term sheet signed at the Belt and Road Forum this April.
The Lekki deep seaport will transform Lagos into a strategic marine hub on the West African coast
Work has been on-going on the railway project since May 2017; the rail project has been contracted to the CCECC, also a Chinese firm. For better speed, the rail project is progressing in different sections at the same time. Reports say it is advancing at the rate of 2km of tracks laid every day. A total of 100 km of tracks is on the ground already, and 80% of the foundation work. As many as 10,000 personnel are currently employed on this project, comprising local labor and expats. The rail project will be complete by May, 2020, 3 years after commencement.
Africa and China have achieved greater levels of economic cooperation in the past 3 decades
The Lekki deep seaport project will make the port one of the deepest in West and Central Africa at a 16.5 meters depth. Continuing his address, Mr Liu stated:
“As one of the most modern, efficient ports in sub-Saharan Africa with the capacity to berth large vessels, it will make Lagos a trans-shipment hub in West Africa and Central Africa.”
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