Okonjo Iweala Denies Diverting $1 Billion Chinese Railway Loan

Okonjo Iweala Denies Diverting $1 Billion Chinese Railway Loan

Sunday, August 16, 2015 7:12 pm

Okonjo-Iweala-Disputed-oil-marketers-claimAyorinde Oluokun.

Nigeria’s former minister of finance, Dr. Ngozi Okonjo Iweala, has denied allegation that $1 billion loan sourced from China-EximBank for the construction of Kano-Lagos rail project was diverted under her watch. The former minister, in a statement issued by Paul Nwabuikwu, her media adviser, on Sunday said the Kano-Lagos rail project was not among the railway projects funded by the Chinese Bank.

She also said there is no way loans from China-EximBank could be diverted since the institution keeps and disburses funds for approved projects to contractors based on milestones. According to her, the funds are not domiciled with the Finance Ministry

It will be recalled that Femi Adesina, the senior special adviser on media and publicity to President Muhammadu Buhari had, in a statement, indicated that officials of Federal Ministry of Transport, led by the Permanent Secretary, Ministry Alhaji Mohammed Bashar, told the President during a briefing last week that a substantial part of a $1bn loan obtained from the China-EximBank by the Jonathan administration for a Kano-Lagos rail project was diverted to other projects. Adesina said in a statement that the President who was furious about the information ordered an investigation into the alleged diversion.

“I want to state categorically that there is no truth in the reported allegation. Anyone who is interested can cross-check with the China-EximBank or the Chinese Embassy,” Okonjo Iweala said in the statement. “The alleged diversion has no substance for the simple reason that the Kano-Lagos project was not even among the projects presented for funding by the China Exim Bank for several strategic infrastructural projects across the country. In fact, it was the Lagos–Ibadan rail project, not Lagos-Kano rail project that was proposed in the original application to the China-EximBank. But in the end, no funds were assigned for the Lagos-Ibadan rail project by the China-EximBank,” said the former minister.

Okonjo Iweala listed projects which are at various stages of progress being funded from facilities obtained from the China-EximBank when she was in government to include $500m for the expansion of four International Airport Terminals in Lagos, Kano, Abuja and Port Harcourt; $500m for the Abuja Light Rail project; $984m for the Zungeru Hydro-electric power project and $100m for the Galaxy Backbone project.

“It is also important to note that even if the alleged project was on the list of China-EximBank funded projects, diversion of any Chinese funds would have been extremely difficult because the terms of the contract and the processes would simply not have permitted such action. The procedure is that funds for approved loans remain in the China-EximBank and are released directly to the Chinese firm executing the contract only after the presentation of duly certified proof of work by the responsible Ministry; in this case it would have been the Federal Ministry of Transport, based on the agreed milestones. For the sake of emphasis, the China-EximBank does not disburse money directly to government and therefore the issue of diversion does not arise,” Okonjo Iweala who described attempt to link her with the diversion as a campaign of calumny said.

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