Buhari Furious Over Diverted Billion-Dollar Chinese Loan: Nigerian President Demands Explanation From Finance Ministry

Nigerian President Muhammadu Buhari demanded an explanation Monday from the West African country’s finance ministry about a $1.1 billion loan from a Chinese bank that was assigned to rail projects in Nigeria but used elsewhere. During a meeting with the transportation ministry, Buhari discovered that only $400 million of the loan remained and the rest was diverted to other projects, a Nigerian newspaper reported.

“I hope that due process was followed before such diversions were carried out. Taking money from one project to another has to be done properly,” Buhari was quoted as saying at the meeting by a spokesman, Garba Shehu, the Premium Times newspaper reported.

Nigeria’s finance ministry initially obtained the loan in 2012 from the Export-Import Bank of China to fund construction of the Abuja light rail project, a standard-gauge rail line from Lagos in southern Nigeria to Kano in the north. However, the project dates to 2007, when former Nigerian President Olusegun Obasanjo signed a deal with China that at the time included a $500 million loan, with $341 million in matching funds from Nigeria, to build the Abuja light rail by 2011.

The rail project was expected to improve transportation for residents of the capital city Abuja in central Nigeria. But the monies were also used for two other “high-priority impact projects” in the transport and information communication technology sectors, former Finance Minister Ngozi Okonjo-Iweala told Premium Times.

The projects, which were expected to be completed this year, included the Abuja light rail project, the state-owned Galaxy Backbone ICT infrastructure and four new airport terminals in Abuja, Kano, Port Harcourt and Enugu. The rail project, which was undertaken by the China Civil Engineering Construction Corporation, was to consume only $500 million of the loan, leaving $500 million for the airport terminals and $100 million for the ICT infrastructure, Okonjo-Iweala said.

However, Buhari expressed concern Monday that the federal government over the years had failed to fully fund and complete some projects, leaving the ventures unfinished or abandoned. The president also stressed a need to streamline and prioritize ongoing projects in the transportation sector, Premium Times reported.

Nigeria is Africa’s largest economy, deriving much of its revenue from its oil industry. But that industry has suffered from declining oil prices, government corruption and mismanaged funds. The Nigerian treasury is reportedly missing billions of dollars, mostly due to the country’s corrupt oil industry. Buhari, a former petroleum minister, has sworn to crack down on graft, but has not yet detailed his plans for economic reform and his Cabinet remains largely empty. The Nigerian leader called Tuesday on the country’s wealthy citizens to help their country succeed.

“With the shock of falling oil prices, lack of revenues and insecurity, the Nigerian elites must now wake up and provide the right guidance in their communities, and also lead the economy on the right path more than they used to do,” he said, Vanguard Newspapers reported.