After Ghana, Nigeria seeks $3b China loan at 3% interest

A 17-member Nigerian delegation led by it Finance Minister, Ngozi Okonjo-Iweala is currently in China to meet officials of the Export-Import Bank of China and China Development Bank over a $3 billion loan, the Daily Trust reports February 22, 2012.

The loans, it is said, will be used to fund some infrastructural projects in Nigeria in the area of power, agriculture, ICT, aviation and others.

The $3 billion loan, which attracts 3% interest, the report said is part of the $7.9 billion external loans that Nigerian President Goodluck Jonathan is requesting the National Assembly to approve.

The Nigerian government has put a ceiling of 30% of its GDP to borrowing.

The African Development Bank, World Bank, Islamic Development Bank, French Aid agency and India are source from where Nigeria will contract the loans.

Ghana recently secured a $3 billion loan from the China Development Bank (CDB) and was approved by parliament Friday August 26, 2011.

The two-tranche credit facility each of $1.5 billion, which have different terms, is the biggest loan facility Ghana has negotiated in recent times.

The first tranche has a five year grace period, 15 years re-payment period; a commitment fee of 1% flat, an interest rate of 2.95% and six months LIBOR (London Inter-Bank Offer Rate) and an upfront fee of 0.25% flat.

The second tranche of $1.5 billion has a grace period of five years, ten years tenure interest rate of 2.285% and six months LIBOR, 0.25% upfront fees per annum and a commitment fee of one percent annum.

By Ekow Quandzie