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China Development Bank to finance Nigeria’s Kaduna-to-Kano rail project

April 5, 2023
China Development Bank to finance Nigeria’s Kaduna-to-Kano rail project

The Nigerian Senate has approved  Development Bank as the new financier for the country's Kaduna-to-Kano rail project for $973 million.

This decision came after another Chinese lender, Exim Bank, withdrew from the project in 2020.

In 2020, 's approved China's Exim Bank as the financier for the rail project, but the bank withdrew later on.

The country's lower house of parliament has also approved the new financier, which will grant a 15-year loan to the rail project at an interest rate of 2.7%.

The rail project is part of President Muhammadu Buhari's administration's plan to upgrade Nigeria's transport network and improve its outdated power grids, to boost agriculture and other non-oil industries to reduce the country's dependence on crude revenues.

However, funding has been a major constraint for the project.

Nigeria's parliament has approved several billions of dollars in project-tied loans from Chinese and other international lenders, but funds have yet to materialize.

In 2022, Nigeria approached  Bank for a loan to fund the Kano-to-Maradi line, which would connect the northern states of Kano, Jigawa, and Katsina, after delays from Chinese lenders.

However, the government has now turned back to China for funding.

Nigeria's poor transport and power networks have held back the distribution of wealth in Africa's biggest economy, where 40% of people live below the national poverty line.

President Buhari will leave office in May after handing over to president-elect , who has promised to tackle a host of problems, including double-digit inflation and industrial-scale oil theft that has hampered an economy trying to recover from the  pandemic.

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