Okonjo-Iwesla responds to billion-dollar loan diversion allegations

The immediate past Minister of Finance, Ngozi Okonjo-Iweala, has denied the allegation that a substantial part of $1.1billion loan obtained from the China-EXIM (Export-Import) for a rail project was diverted by the Jonathan administration. President Muhammadu Buhari had last week questioned the alleged diversion of the loan. He was reacting to the specific instance of the diversion of a substantial part of the money obtained from the Chinese Exim Bank, for the construction of a standard gauge rail line linking Lagos to Kano but which was moved elsewhere. The permanent secretary in the Ministry of Transport, Mohammed Bashar, had told the president that only $400 million of the loan remained with the ministry of finance. But the former finance minister, Mrs. Okonjo-Iweala, said Sunday that there was no truth in the allegation, challenging those interested in cross-checking the facts to get in touch with the China-EXIMBank, or the Chinese Embassy. “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 EXIMBank for several strategic infrastructural projects across the country,” the minister said in a statement signed by her spokesperson, Paul Nwabuikwu. “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,” the statement said. The projects listed for funding with the China-EXIMBank loan, she explained, were at various stages of progress the expansion of four International Airport Terminals in Lagos, Kano, Abuja and Port Harcourt ($500million); Abuja Light Rail ($500million); Zungeru Hydro-electric power project ($984million) and Galaxy Backbone project ($100million). Even if the alleged project was listed among China-EXIMBank funded projects, Mrs. Okonjo-Iweala said diversion of any Chinese funds would have been extremely difficult, since the contract terms and the processes would not have permitted any 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,” he statement said. “For the sake of emphasis, the China-EXIMBank does not disburse money directly to government and therefore the issue of diversion does not arise.” The statement said the attempt to link the former minister to the allegation was “another example of the kind of whispering campaign of calumny, innuendo, misinformation, and outright distortions being perpetrated by certain political elements against Dr. Okonjo-Iweala in a bid to try to damage her reputation. Premium Times