Western world pushed African countries to seek unfair loans from China – Olawale Rasheed | Dailytrust

Western world pushed African countries to seek unfair loans from China – Olawale Rasheed

in this interview with Daily Trust, said western countries’ emphasis to fund soft development projects and promotion of LGBT and campaigns against Female Genital...

Olawale Rasheed, the CEO of African Railway Consulting Ltd
Olawale Rasheed, the CEO of African Railway Consulting Ltd

Olawale Rasheed, the CEO of African Railway Consulting Ltd., in this interview with Daily Trust, said western countries’ emphasis to fund soft development projects and promotion of LGBT and campaigns against Female Genital Mutilation, among others, pushed African leaders to go for Chinese loans to fund infrastructures that the continent is in dire need of. Excerpt:

What led to the decay of railway infrastructure in Nigeria?

Most of us grew up to know the railway running from Lagos to Kano. I remember I used to go to Kano regularly from Ibadan and it was functioning relatively well. Now, what happened? I think the military has a lot of positive and negative impacts on the country. The decline of the railway started from the collapse of the Second Republic. 

When the military took over, there were a whole lot of changes in governance. From 1984 to 1986, there was disinterest in railway expansion and maintenance. But one thing with railways is that there must be constant maintenance and handling of infrastructures like replacement of train parts among others. 

From that period, the dereliction of responsibility led to many lines going down like the Port Harcourt-Maiduguri, Eastern line while the other one running from Kano to Maiduguri, the tracks were off and coaches went bad.

But in 1999, the civilian administration of Obasanjo came up with a revival plan with the 25-year development master plan. The minister of transportation we had from 1999 to the present minister started introducing revival and expansion plans.

The 25-year master plan actually covered the replacement of rolling stock, rebuilding of tracks and some other things.

After Obasanjo, Yar’adua, then Jonathan came in and picked the master plan for continuous implementation. We had worked on the Abuja-Kaduna line; we have some work within Abuja. There was the rehabilitation of the old gauge from Lagos to Kano and whole lots of steps were taken under Jonathan.

Luckily, President Buhari did not abandon all the inherited projects. He completed the Abuja-Kaduna and if not for that completion, the North would have been cut off from the rest of the country because of the banditry problem.

President Buhari also broke a jinx because the Itakpe-Warri line has been on for almost 30 years; to be fair to him, he completed the line. Even though they are still doing some communication work and skeletal ones, the job is largely completed. I think the plan is to link the Itakpe-Warri line to the port at the coast in Warri. The administration also completed the Lagos-Ibadan Standard Gauge line and a couple of works are ongoing.

But some will question why the government is borrowing to construct new rail while old ones can be upgraded to save the country from more debt?

Before I answer the question, I want to put it this way. When I say the Nigerian railway system is coming up, I am not saying all is well with the system. There are lots of things that are still wrong with the railway system. It will interest you to know that we are still running a 1958 Railway Act in 2021.

This act is a colonial one so most of its provisions are not in tandem with modern reality. One failure of the civilian administrations is their failure to repeal the Railway Act. There is no justification for any country as big as Nigeria to be running a colonial act for the railway.

Secondly, we need a new legal framework to fast-track the development of the Nigerian railway. The era of government solely building infrastructure has passed and the government is facing a paucity of funds.

What others do, the best practices over the world is to open up the infrastructure sector to the private sector. So, we need to open up the railway for private sector participation. We have not done that. Coming to the question, for the government to continue building new lines boiled down to a new legal framework.

For instance, in Brazil, the government came out with a policy. It called local and international private companies to look for any railway line they can build; justify why it is necessary, can they recoup their costs, how many years will it take to be completed and how will they run. 

From this, 68 companies showed interest to design, build and run the lines without any money from the government. As of December, the government has signed 28 new rail line contracts for various companies.

The only thing the government will do is to monitor their activities. If the companies complete the projects in various parts of the country, it will increase the number of kilometres of rail available in the country, boost the economy of the areas, and employ lots of people, helping government in job creation. 

Those companies will pay tax to the government, boosting government revenue and it will deepen the strength of the economy; all without the government spending a penny. 

I see no reason why we can’t come up with a legal framework that will open up our railway for private sector investment. That is why the government has to borrow to finance investments.

Companies from China are mostly awarded contracts to construct the new rail lines. Are local companies not having the capacity to undertake the job?

We don’t play politics with infrastructure. I consistently commend this administration for the achievement recorded in railway. However, the area of its fault is the approach to financing the railway; it is faulty.

We assume we can focus only on China to finance our railway infrastructure. Part of the reason why many of us are not in support of that approach is what has happened now. China can’t fund it because they have their own challenges too. 

Also, the model adopted in terms of the loan is controversial, our leaders tried but they did not do due diligence in terms of the model. For example, they give us the loan; they do the design, build, run and bill us. The worst is that the agreement supersedes our procurement law.

Why we made the error? I guess it was out of the eagerness of the government to build infrastructure but in the process, we neglected other things. The loan is an error because China is operating in Egypt but it is not taking loans but doing contractor finance projects to the extent that China is entering into consortium relationships with French and Lebanese companies to execute railway and large infrastructure projects in Egypt. So how come Nigeria and Kenya adopted this model of taking loans that you do not know the details of?

Also, the issue of China and infrastructure in Nigeria and Africa is that for big debate but what I tell people is that Africa needs infrastructure. The west, our friends, prefer to spend money to promote LGBT rights, anti-FGM campaigns and fund softcore areas of development.

Meanwhile, the problem of the continent is hard infrastructure. To get to Cameroon, Niger or N’djamena is a problem. Why is it a problem that we can’t fly a plane or train from here to the places? We have inter-connectivity problems because our roads are not good, our airlines are an issue and we don’t have railway connectivity.

The west for some time was reluctant to pump money into those areas and China came up with a road and belt initiative and the whole of Africa jumped into it as an opportunity. We can’t blame our government for joining but they could have been smarter in terms of approach.

Now, China has helped by saying the loan is not forthcoming because they too have issues and it is diversifying into funding digital infrastructure as it will bring quick returns. 

They too are having their economic challenges so they can’t afford to pump money for hard infrastructure projects.

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