China Eximbank provides $100 million preferential buyer’s credit for Phase 1 of the Nigeria National Information and Communication Technology Infrastructure Backbone Project (NICTIB) (Linked to Record ID#73385)

China Eximbank provides $100 million preferential buyer’s credit for Phase 1 of the Nigeria National Information and Communication Technology Infrastructure Backbone Project (NICTIB) In November 2006, Galaxy Backbone Limited — a public enterprise of the Federal Government of Nigeria incorporated in 2006 with the primary mandate of setting up and operating a unified Information and Communication Technology (ICT) infrastructure platform that addresses the connectivity, transversal and other technology challenges — signed a $117 million commercial contract with Huawei Technologies Co.

Ltd for Phase 1 of the Nigeria National Information and Communication Technology Infrastructure Backbone (NICTIB) Project.

Nearly four and a half years later, in May 2011, China Eximbank agreed in principle to provide a $100 million preferential buyer’s credit to finance 85% of the cost of the commercial contract.

Then, on January 5, 2013, China Eximbank and the Government of Nigeria signed a $100,000,000 preferential buyer’s credit (PBC) agreement for Phase 1 of the Nigeria National Information and Communication Technology Infrastructure Backbone (NICTIB) Project (captured via Record ID#30340).

The final maturity date of the loan (PBC) is September 21, 2032.

As of December 31, 2020, Nigeria’s Debt Management Office (DMO) reported that the China Eximbank PBC (loan) had achieved a 100% disbursement rate ($100 million) and the borrower had made interest repayments worth $10.66 million and principal repayments worth $3.86 million to the lender. The loan’s (principal) amount outstanding, as of December 31, 2020, was $96.14 million.

Under the terms of the PBC agreement, the Government of Nigeria was responsible for paying 15% of the cost of the commercial contract with Huawei Technologies Co. Ltd prior to project implementation. Advance payment delays by the Government of Nigeria resulted in major project implementation delays.

In December 2006, Galaxy Backbone Ltd made an advance payment of $10 million to Huawei Technologies Co. Ltd.

Then, in December 2013, the Federal Ministry of Finance of Nigeria — on behalf of Galaxy Backbone Limited — paid the remaining balance of the advance payment ($7.65 million) to Huawei Technologies Co., Ltd and officially requested that Huawei Technologies Co., Ltd. commence project implementation.

The purpose of Phase 1 of the NICTIB Project was to build a 1482 km nationwide backbone network with fiber optic technology and connect up to 3000 Ministries, Departments and Agencies (MDAs) in over 3000 office locations nationwide.

The first phase of the project involved the laying of fiber optic cable from Abuja to Onitsha to Lagos, and Onitsha to Port Harcourt to Uyo.

More specifically, Phase 1 sought to install fiber optic cable from Abuja – Akwanga – Lafia – Makurdi – Enugu – Awka – Onitisha – Asaba – Benin – ore – Ijebu Ode – Lagos and also link from Onitisha – oweri – PH – Uyo.

It also sought to establish Data Centers in Abuja and Metro access systems in cities like Abuja, Makurdi, Enugu and Lagos. Phase 1 was completed on or around August 3, 2018.

Then, on September 5, 2018, China Eximbank and the Government of Nigeria signed an RMB 2,300,000,000 ($328 million) government concessional loan (GCL) for Phase 2 of the Nigeria National Information and Communication Technology Infrastructure Backbone (NICTIB) Project (captured via Record ID#73385).

The final maturity date of the GCL is March 22, 2038.

As of December 31, 2020, Nigeria’s Debt Management Office (DMO) reported that the China Eximbank GCL (loan) had not yet been disbursed and the borrower had not made any interest or principal repayments to the lender. The purpose of Phase 2 is to extend the fiber optic cable network to 19 states in Northern Nigeria.

More specifically, the cable is expected to run from Abuja to Plateau, Gombe, Bauchi, Maiduguri, Kano and the rest of Northwestern Nigeria. Upon completion of Phase 2, it is envisaged that the fiber optic cable network will be 3441 km in length. However, this project has encountered delays and implementation problems.

In November 2022, Nigeria’s House of Representatives launched an investigation of the project, including a forensic audit of all relevant transactions to execute Phase 1 and Phase 2.

The House of Representatives also urged Galaxy Backbone Limited and Nigeria’s Ministry of Finance, Budget and National Planning to ‘immediately halt all certificates of completion and payments, respectively, in lieu of the project, pending the completion of the investigation by the committee.’ These resolutions were based on the unanimous adoption of a motion issued by a legislator named Benjamin Bem.

At the time, Bem noted that Nigeria’s Galaxy Backbone Limited, which falls under the authority of the Nigerian Ministry of Communications and Digital Economy, signed an MoU with Huawei Technology Limited in 2018 to provide fiber infrastructure.

He said following the signing of the MoU, Huawei Technology Limited was expected to design, manufacture and deploy a kit that would control data movements across all ministries, departments and agencies in Nigeria (with another loan from China Eximbank).

The lawmaker expressed concerned that ‘Galaxy Backbone Limited […] made claims that the completion of Phase 1 of the project is expected to reap revenue to the tune of billions of naira for the government’ and that ‘whereas there has been no oversight to ascertain the level of the job done [during NICTIB Phase 1] and verify claims of revenue generated by the agency, there is a current bid to access an additional [$328 million loan] to develop the NICTIB Phase II, which covers 19 northern states.

He added that ‘[t]he House is [cognizant] of the need to ensure judicious use of the nation’s commonwealth, while ensuring the government’s ICT policy is implemented according to every aspect of statutory provisions guiding the execution of the project.’