The International Monetary Fund (IMF) has warned Nigeria and other African countries to be wary of the terms and conditions that come with loans/grants from China.
According to the IMF, African countries must always ensure that the loan arrangement and terms of the agreement favour them. The IMF raised this concern through its Financial Counsellor and Director of the Monetary and Capital Markets Department, Tobias Adrian.
Adrian made the suggestion while speaking at a press conference on the Global Financial Stability Report (GFSR) at the ongoing springs meeting of the World Bank and IMF in Washington DC.
While Adrian admitted that capital flow is important for a country’s development, he warned that African countries should not ignore or pay less importance on the terms and conditions that surround the loan in order not to fall victim to slave deal that becomes difficult to offload.
The concern is beyond contract terms: There has been concern regarding the business-relationship between African countries and the Chinese Government. The United States, in particular, has expressed concern, saying the trade and loan agreement between African countries and China is increasing the influence of the Chinese Government in the region.
Why the Nigerian Government is favouring Chinese loan
The Chairman of United Bank for Africa (UBA), Tony Elumelu, has explained why China and Nigeria’s trade relations have continued to grow despite the Asian country’s trade war with the United States of America.
According to him, Nigeria is a land of opportunity for anyone willing to do business or invest in businesses as Nigerians are enterprising, and the Chinese have identified the prospect in the country, even as Nigeria has opened its doors for the Asian tiger.
Note that Nigeria’s close economic ties with China have often been blamed for the US and the United Kingdom’s unwillingness to invest in Nigeria.
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