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Nigerian Govt Ditches China, Seeks $14.4 Billion Rail Loan From Standard Chartered

Choosing not to borrow from China could be a way to cut Nigeria's exposure to the country, which stood at $3.4 billion as of March.

The Nigerian government is counting on Standard Chartered Plc for funding as it moves on with the ambition to develop two key rail lines in the country's south, a departure from its original resolve to source the loan from a syndicate of lenders based in China.

It is now in the midst of negotiation with the British multinational bank, which focuses on providing financing to African, Asian and Middle East markets, with a view to funding an upgrade of a narrow-gauge track in the South-East and the building of a standard-gauge on the coast, both projects estimated at $14.4 billion, Minister of Transportation Rotimi Amaechi told Bloomberg in an interview.

The railway infrastructure will be constructed by China Civil Engineering Construction Corp (CCECC), which has entered pact with the government.

"We've moved away from China in some of our projects," the minister said on Saturday in Abuja, and added during his discussion with Bloomberg that Zainab Ahmed, his counterpart in the finance ministry, would lead Nigeria's talks with Standard Chartered.

Choosing not to borrow from China could be a ploy by the government to cut Nigeria's exposure to the country, which stood at $3.4 billion as of the end of March, going by the figures issued by the debt office on Wednesday.

Nigeria spent about 12.6 per cent or $195.5 million of the entire money it used to service its external debt last year to pay part of its debt to China.

Standard Chartered commenced operation in Nigeria 22 years ago, and midwifed the inflow of investments in the sum of $2.5 billion into Africa's largest economy in 2020 alone of the total $9.7 billion, the biggest by any bank, Bloomberg said Thursday, citing data from the statistics office.

Mr Amaechi had in March said at the groundbreaking of the CCECC's revamp of the Eastern Line connecting Port Harcourt to Maiduguri that a consortium of Chinese financiers would support the project.

State-owned CCECC inked a deal valued at $11.2 billion with Nigeria in 2014 for the building of the Coastal Line that would link Lagos with Calabar in the South-South.

President Muhammadu Buhari disclosed in 2017 China's Export-Import Bank would soon endorse a $3.5 billion facility to help tee off the development of the standard-gauge line, spanning 1,400 kilometres, planned to be constructed in segments.

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