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China lends Nigeria $1.6b to fix rail

Tuesday May 23, 2006
By Chris Buckley


BEIJING - China will give Nigeria a US$1 billion ($1.62 billion) loan to fix its dilapidated railways, Xinhua news agency said yesterday, in another sign of China's growing economic sway across Africa.

Nigerian Finance Minister Ngozi Okonjo-Iweala announced the deal in Abuja, Nigeria's capital.

"Provision of infrastructure is critical for economic development," Xinhua reported her as saying.

Under the deal, China will give a concessional loan of US$1 billion and Nigeria will come up with matching funds. The money will be used to fix old lines and buy new rolling stock and equipment.

In past decades, China sent thousands of engineers and doctors to African countries in the name of revolutionary Third World unity. But now business interests are at the fore.

Last week, China's Citic group and China Railway Construction announced they had won a tender to build 528km of the 1216km Algeria East-West Highway.

In January last year, China offered Angola a US$2 billion loan to repair its infrastructure.

And in January this year, China's top offshore oil producer, Cnooc, agreed to pay US$2.3 billion for a stake in a Nigerian oil and gas field - its largest ever overseas acquisition.

China has rejected Western efforts to link aid and loans for African countries to demands for improved human rights and government accountability, saying countries should choose their own development priorities. China's hands-off approach has come under criticism from Western human rights activists, who say Beijing has put its economic interests before humanitarian concerns in Sudan and other strife-torn countries.

- REUTERS