Lagos, April 15, 2019 A Financial Analyst, Dr Samuel Nzekwe, has urged the Federal Government to look critically into its borrowings from China to ensure local contents in implementing the projects for which the funds were meant.
Nzekwe said in an interview with the News Agency of Nigeria on Monday in Lagos that loans taken from China did not encourage local content in the delivery of projects for which they were taken.
NNN reports that the International Monetary Fund (IMF) has cautioned Nigeria and other developing countries against taking loans from China due to unfavourable loan conditions.
However, the Federal Government has allayed fears on the country’s escalating debt stock which rose from N21.12 trillion in 2015 to N24.38 trillion in 2018, saying the debt was sustainable.
Nzekwe said that though such loans boosted infrastructure development and economic growth, they did not support human capital development.
The former president, Association of National Accountants of Nigeria (ANNN), explained that most times when China gave out loans, it used its manpower and equipment among other things needed for the project for which the loans were taken.
“The loan they took from China for the rail system has shown that Nigeria is at a disadvantageous position.
“The Chinese will provide all the raw materials needed for the project, including labour because the equipment they bring are marginal.
“One of the equipment can take the work of 2,000 men within two hours. But you have paid for all these things because they are part of the loans.”
Nzekwe said Nigeria should be able to provide about 20 per cent of local content in any project for which any loan was taken.
He added that such loans would be more beneficial to Nigeria, if local content was embraced.
According to him, there is no local content in most projects embarked upon by China.
The accountant said local content would continue to be stagnant if the services of Nigerians were not used for such contracts.
“We need to ensure our own contribution. This is because the equipment they bring are theirs and the country has already paid for it.
“So, we need to see how we will engage our people. That’s why we need to talk about human capital development which Nigeria is not doing.
“If you look at Nigerian budget, you will see that human capital development is very negligible and in small percentage.
“This means we need to train our people to be able to fit in into such roles. So, Nigeria has to look inward to develop its manpower.
“So, what you have done now is that you are promoting their economy to our own disadvantage,” the ex-ANNN boss said.
Nzekwe said if Nigerians, particularly the artisans, could ensure good delivery of their services, this would encourage foreign contractors to use the locals.