Nigeria gives up waiting for China Exim loan for railway project

Nigeria said it won’t wait any longer for the Export-Import Bank of China to finance a major part of a crucial railway project in Africa’s biggest economy.

The government has received from the state-owned lender only about 15% of the funding required for a line originally estimated to cost $8.3 billion that will link the commercial hub of Lagos to the northern city of Kano. President Muhammadu Buhari’s administration has been expecting a response from the Chinese authorities regarding the rest of the loans but hasn’t received a reply, Transport Minister Rotimi Amaech said.

“We were waiting,” Amaechi told reporters Wednesday in Abuja. “They kept delaying us.”

China’s hesitancy is a fresh setback for Buhari’s plan to link all major regions of the country with railway lines by the time he leaves office next year. The West African nation needs at least $3 trillion over 30 years to build roads and power plants to close a huge infrastructure gap, according to Moody’s Investors Service.

The government has since approached Standard Chartered Plc and unidentified Chinese commercial banks to help fund the project, Amaechi said. Standard Chartered has approved some level of funding, he said. The London-based lender did not respond to calls for comment.

The Chinese embassy in Abuja didn’t immediately respond to an email seeking comment.

Nigeria’s government used a $1.3 billion loan from China Eximbank to fund a 157-kilometer segment of the Lagos-Kano railway as far as the city of Ibadan, but the rest of the line remains unbuilt. Buhari’s administration last year turned away from China Eximbank to Standard Chartered to arrange funding for two other rail projects in other parts of the country anticipated to cost more than $14 billion.