Nigeria scores $1.1B in low-interest loans from China

JOHANNESBURG, South Africa — China has offered $1.1 billion in low-interest loans to Nigeria for badly needed infrastructure development, part of Beijing's continuing efforts to bolster relations with resource-rich African nations.

Nigeria is the most populous African country, and its biggest oil producer, but struggles with crumbling, outdated infrastructure especially in its overcrowded big cities.

Nigerian President Goodluck Jonathan, who is leading a business delegation on a four-day trip to China, signed the loan agreements during a meeting with counterpart Xi Jinping in the Chinese capital.

The loans will help with building roads, hydroelectric plants, airport terminals in four cities and a light-rail line for the country's capital, Abuja.

According to The Associated Press, Chinese companies are already building roads across Nigeria in contracts worth $1.7 billion. 

One Chinese expert said that a reduction in US demand for Nigerian oil is pushing the West African country to strengthen ties with other major oil importers, such as China.

"Nigeria is the first African country to include RMB [China's currency] in the foreign exchange reserves, which shows its recognition of the value of China's economy," He Wenping, director of African studies at the Chinese Academy of Social Sciences, told the English-language China Daily. 

During his visit to China, Jonathan will meet with other top leaders including Premier Li Keqiang, and will also hold meetings with heads of major Chinese conglomerates such as state-owned oil and gas giant Sinopec, and technology firms Huawei and ZTE.

A commentary published by China's state-run Xinhua News Agency praised Nigeria for offering "valuable business opportunities for China." 

"As a resource-rich country with some 70 percent of its population under the age of 30, Nigeria has an enviable growth potential. China can fund Nigeria's development with low-interest loans, technical assistance and favorable trade policies," the commentary said.

The Punch, a Nigerian daily, reported that Jonathan told a breakfast meeting of African ambassadors to China that Africa must strengthen its democratic institutions.

“President Jonathan reaffirmed his conviction that African countries needed to strengthen their institutions of democratic governance to guarantee political stability and sustained development," an adviser to Jonathan said in a statement.

“He said democratic governance ought to be nurtured and encouraged until it takes firmer root across the continent."