Clever Amada, a rice farmer from Bayelsa State, has to travel to neighboring Delta State or even as far as Ebonyi to use private mills each time he needs to mill his rice since there are no standard mills available in Bayelsa State.
The Muhammadu Buhari administration had planned to establish 40 parboiled rice processing plants in 2016 with a budget of $326 million, but the project didn’t come to fruition due to China’s Exim Bank, the main financier, not granting the loan for the project. Amada, who is also the secretary of the Rice Farmers Association of Nigeria (RIFAN) in Bayelsa, expressed his disappointment with the lack of a standard mill in the area.
Former President Muhammadu Buhari
“In Rivers State there is no standard factory. In Akwa Ibom, I don’t know, but from my conversation with colleagues, Akwa Ibom also does not have a standard mill, nor does Calabar (Cross River). Therefore, in the entire South-South region, there is no standard rice milling plant.”
Amada said the proposed rice processing plants would have eased the challenges of rice farmers.
“If this project had been implemented, rice farmers and processors would have benefited a lot. It would have reduced the stress of milling for farmers in the state and even across the country,” he said.
Helen Bimalayegha also grows rice in the South-South state.
“As a rice processor, it is not easy to mill here; whenever I want to process rice, I always have to go to a place near Rivers State, and it is always stressful. If there were any around here, it would make it easier for us to produce rice,” said Mrs. Bimalayegha.
China has become Africa’s largest bilateral lender over the past two decades, alongside Chinese public and private lenders. accounting for 12 percent of the continent’s $696 billion external debt for 2020. Nigeria alone owed China $4.29 billion in December 2022, up from $1.39 billion in June 2020. 2015, according to Debt Management Office (BMD).
However, over the past three years, Chinese creditors have seemed less willing to lend to African nations. As they retreated, so did the critical projects they were meant to fund.
“Loan reversals have hampered the drive to deliver critical development projects, including in the agricultural sector, in Nigeria and elsewhere. That has implications for development and communities,” said Anietie Umoren, senior researcher at No Hunger Food Bank, a food research and aid organization.
Failed and abandoned projects
The failed rice project is just one of many that failed to take off or stalled due to lack of funds. China has not released promised funds for two major rail projects in Nigeria: a $5.3 billion rail project from Ibadan to Kano, and the $3 billion reconstruction of a 1,000-kilometer rail line between Port Harcourt and Maiduguri.
In both cases, Nigeria had provided 15 percent of the project financing, allowing China Civil Engineering Construction Corporation to begin laying the tracks. But without 85 percent of the Chinese government, progress can only happen if Nigeria funds the project from its budget or gets the money from elsewhere.
“The Abuja-Kano and Port Harcourt-Maiduguri projects are underway but the 85 percent foreign loan is yet to be secured. We have been pushing these two projects solely through appropriation, which is part of the 15 percent that Nigeria is supposed to contribute,” former Nigerian Transport Minister Mu’azu Sambo said last year.
Chinese funding for the Abuja light rail project has also stalled, with a promised $157 million failing to arrive years after it was agreed.
China Exim Bank had also promised to provide $183.62 million and $208.90 million for “ancillary” and “incremental” projects related to the expansion of four Nigerian airports. However, as of December 2021, two years after the agreement was signed, the funding had not been released, according to the DMO.
The airports have already been expanded with a $500 million Chinese loan and $100 million counterpart financing from the Nigerian government. However, the Lagos and Abuja terminals need additional work. Existing facilities, buildings and equipment must be demolished, refurbished and rebuilt elsewhere at significant cost in order to expand the terminals and achieve full operation.
Former minister Hadi Sirika said the problem was “fundamental” and had changed the airport master plan. He explained that the original plan did not take into account the additional works, power and water supply that would be required.
Hadi Sirika
He also said it was discovered that the terminal building would block both the control tower and the fire tower. As a result, additional work is needed to connect the new terminal to the existing one and expand the apron to accommodate larger aircraft.
Why did China retreat?
The Chinese Embassy in Abuja did not respond to phone calls or email queries about the official reasons for the Chinese government’s actions. However, analysts say China’s reluctance appears to indicate a reduced appetite to finance commercially risky projects.
The British think tank Chatham House said in a report that Chinese authorities are now seeking greater control over infrastructure financing. “Loans are generally on a smaller, more manageable scale than before…” she said.
Yun Sun, head of the China program at the Stimson Center in Washington, said China had been cutting its lending for some time. “Especially for countries that already have problems with debt sustainability, the Chinese have tightened their wallets,” she said in October.
The COVID-19 pandemic and the war in Ukraine worsened the debt problem.
In 2020, sub-Saharan Africa’s total external debt was $700 billion, up from $380 billion in 2012. The amount owed to official creditors, such as multilateral lenders, governments, and government agencies, increased from $120 billion dollars to 258 billion dollars during the same period.
In August 2022, the Chinese government announced that it had forgiven 23 loans to 17 African countries. This followed an earlier cancellation of at least 94 interest-free loans to African countries worth more than $3.4 billion between 2000 and 2019.
While some African countries have struggled to pay China, Nigeria has met its obligations. The DMO said that in December 2020, Nigeria received US$1,740 as a waiver for its prompt payment to EXIM Bank of China.
Former Transport Minister Rotimi Amaechi suggested in 2021 that China was hesitant towards Nigeria after the National Assembly investigated the federal government’s ability to pay.
Former Minister of Transport, Rotimi Amaechi. [PHOTO CREDIT: Official Twitter page of Rotimi Amaechi]But as the various projects have stalled, beneficiary communities across Nigeria are lamenting the consequences for their livelihoods.
Impact
Across Nigeria, abandoned projects demonstrate how the success or failure of such high-risk financing deals could impact communities and end users.
Comfort Sunday, a rice farmer in Abuja, shared her difficulties when she needed to process rice in her Angwa neighborhood of the federal capital.
“Here, milling rice after harvesting is a problem,” he said. “After harvesting, we always use a large pot to parboil it manually, and it takes a considerable amount of time.”
“Unfortunately we do not have the financial means to purchase processing machines, as they are quite expensive and out of our reach. Using the machine would be much more efficient, but the only one available is located in a distant area called Gwa Gwa, far from our location in Angwa,” said Mrs Sunday.
“Earlier this year, I went there to grind rice and for every 100kg bag, I spent N3,000. I think the cost has increased even more now, especially given the current costly circumstances,” he added.
The only machine at a nearby private facility is in Gwa-Gwa, 10 kilometers away.
“The path to using the machine is stressful and expensive. If we had access to the machine locally, we would significantly alleviate the stress we face,” he stated.
Nigeria’s national rice policy identifies “low access to modern processing (parboiling) technologies” as one of the problems in the sector. One part of the proposed solution is to increase the number of local processors trained in improved parboiling technologies to 30,000 by 2030.
Newslodge random survey reveals that 50kg of local rice now sells for around N50,000, with smaller measures now selling for between N1,000 and N1,100.
According to Ebuka Nnamdi, a rice seller at Kubwa market, Abuja, the price of local rice has increased in recent months.
“The price I sell today, I can’t say it will be the same tomorrow, the price goes up every day. For example, on Saturday, a quarter bag of this rice cost N9,000, but now, today is Tuesday, it now costs N9,500. The price is unpredictable,” Nnamdi said.