According to the United States, China may be able to influences the Nigerian government through loans.
This was revealed in the US Department of State paper titled “Integrated Country Strategies.”
The document was reviewed and amended on June 23, 2023, after being initially approved on April 6, 2022.
The document claims that China provided sub-prime finance for numerous infrastructure projects throughout the nation.
A subprime loan, according to the Corporate Finance Institute, is one that is given to individuals who do not meet the requirements for conventional loans at an interest rate above prime.
The text of the document stated, in part, that “Meanwhile, China offers sub-prime financing for a range of infrastructure projects, with the potential to add unnecessarily to
Nigeria’s debt burden and increase Chinese influence over the Nigerian government.”
Nigeria owed the Exim Bank of China $4.34 billion as of March 2023.
The Debt Management Office disclosed in a document titled, ‘Status of Chinese loans as at September 30, 2021, 15 projects were funded with Chinese loans. The 15 projects included 4 rail-related initiatives.
The political and economic structure of the nation was also criticized by the US in its document on Integrated Country Strategies.
“Patronage-based political and economic decision-making, with little to no coordination between relevant ministries, and a disempowered civil service that does not adequately advise the Federal Government or sustain policy objectives over multiple administrations, are Nigeria’s fundamental problems,” the document stated.
Political and business elites advocate for policies that advance their short-term individual interests over the stability and unity of the state in the long run.