The Debt Management Office (DMO), yesterday, put Nigeria’s loan liability to China at $3.121billion as at March 31 2020, representing 3.94 per cent of the nation’s $79.3 billion debt portfolio.

The move might have followed recent controversies generated by the issue in the public space.

The government agency explained that in terms of foreign sources, loans from China accounted for 11.28 per cent of the external debt stock of $27.67 billion in the period under review, indicative that the Asian giant is not a major source of funding for the Federal Government.

A statement made available to reporters stated: “The total borrowing from China as at March 31, 2020 is $3.121 billion. The concessional loans have an interest rate of 2.5 per cent for 20 years. The terms and other details of the facilities are available at dmo.gov.ng.

According to the DMO, the “terms are compliant with the provisions of Section 41 (1a) of the Fiscal Responsibility Act, 2007. In addition, the low interest rate reduces the interest cost to government, while the long tenor enables the repayment of the principal sum of the loans over many years.

These two benefits make the provisions for debt service in the annual budget lower than they would otherwise have been if the loans were on commercial terms.”

It revealed that the credit was deployed to 11 critical infrastructure, including railway and road projects across the federation.