Okonjo-Iweala denies diversion of rail loan

Former Finance Minister, Dr Ngozi Okonjo-Iweala has denied recent allegations that a $1 billion China-EximBank loan for the Lagos-Kano rail project was diverted under her watch.

In a statement made available to the media on Sunday, Okonjo-Iweala noted that, “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 former finance minister noted that the existing procedure for accessing China-Exim Bank loan “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.”

The China-EximBank she said “does not disburse money directly to government and therefore the issue of diversion does not arise.”

To corroborate her defence, Okonjo-Iweala called on interested parties and individuals to “cross-check with the China-EximBank or the Chinese Embassy” because according to her, “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.”

“It was the Lagos–Ibadan rail project, not Lagos-Kano rail project that was proposed in the original application to the China-EximBank she said ” but in the end, no funds were assigned for the Lagos-Ibadan rail project by the China-EximBank.”

The projects being funded from facilities obtained from the China-EximBank and which are at various stages of progress and can be confirmed, Okonjo-Iwela pointed out are:

  • $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
  • $100m for the Galaxy Backbone project

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