China Loans Niger Republic $400 Million In Return For Crude Oil
Niger’s military junta has signed a US$400 million deal with a Chinese state-owned oil giant as part of its plan to “diversify international partnerships” after cutting ties with France and the United States.
The deal signed on Friday by Prime Minister Ali Mahaman Lamine Zeine and China National Petroleum Corporation (CNPC) chief executive officer Zhou Zuokun will see the Chinese company advance the money to help Niger’s military rulers meet short-term obligations as the economy struggles to recover from the impact of sanctions.
According to the Nigerien Press Agency, the Chinese company will be repaid with crude oil shipments within 12 months at an interest rate of 7 per cent.
“There is no shadow over this as we have safeguarded the interests of our country,” Zeine said after signing the deal in the presence of Chinese ambassador Jiang Feng, who has been leading the negotiations with Niger.
“China is a great friend for Niger, we can never say it enough,” Zeine said. “It must be remembered since the beginning of this great oil adventure, China has always been at the side of our country and today it is proven that at such crucial moments, we could obviously manage to request an advance, these are Niger’s rights, and we will give ourselves all the means to repay them.”
“This signature demonstrates the friendship … and fruitful cooperation between the two states,” said Jiang.
Resource-backed deals of this type are extremely popular with Chinese lenders, but critics say they increase countries’ vulnerability to debt.
Africa Development Bank president Akinwumi Adesina has called for an end to loans given in exchange for oil or natural resources, describing them as “non-transparent, unfair and corruptible” adding that they “complicate debt resolution, and mortgage the future of countries”.
“Africa must end all natural resources-backed loans,” he said last year during the Summit for New Global Financing Pact held in France.
The finance model was pioneered in Angola, which received billions of dollars from China for its reconstruction at the end of the country’s 27-year civil war in 2000 and still uses oil shipments to repay Chinese loans.
