The dissolution of the previous Federal Executive Council (FEC) by President Muhammadu Buhari might cost the Nigerian Communications Satellite Limited (NigComSat) $150 million Chinese loan.
The change in the Federal Executive Council affected the negotiation process as the loan agreement hadn’t been concluded as the time of the dissolution of the council. The $150 million Chinese loan was for procurement of back-up satellite in the orbit.
Where the problem lies: According to a report, the negotiation had begun under the former Minister of Communications, Adebayo Shittu. However, the Minister didn’t return for a second term to see the deal through. He was replaced by Isa Pantami.
The new minister of communication hasn’t been fully briefed on the negotiation since taking over office, the report disclosed as he has been working on other related issues.
However, on the Chinese loan for procurement of back-up satellite in the orbit, talks have broken down and the NigComSat has reportedly moved on to other projects that relate to infrastructure and improving its commercial operations.
What you need to know: While in office, Shittu stated that the contribution of the Chinese wasn’t a loan but would rather serve as equity, Nairametrics had reported in April 2019. Shittu said it was a loan that was initially proposed but because Nigeria couldn’t afford the required 15% counterpart funding, it was decided that the loan should be converted into equity.
He further stated that when the additional satellites were acquired, it would have the capacity to serve the whole of Africa such that Nigcomsat could provide services to other countries in Africa.
NigComSat future project: NigComSat intends to spend N105 million to bolster its Satellite Control Centre; N369 million on overhauling of its Radio Frequency and Hub Infrastructures; N92.4 million on its Public Access Satellite TV Channel, while also budgeting N112.1 million for improvement of security solutions for teleport, the 2020 budget shows.