By Matthew Tabe
Eight years after the federal government terminated the Closed Circuit Television (CCTV) project; Nigeria has paid over N40.05 billion interest accruable on the loan ZTE, a Chinese firm, obtained from China EXIMBank to finance the project.
ZTE was awarded the CCTV project contract under the federal government’s National Public Security Communications System in 2008 by the administration of late President Umaru Musa Yar’Adua to install CCTV cameras in Abuja, Lagos and throughout the 36 states of the federation and 774 local government areas.
The project which was to cost $470 million, about N76 billion at the time, had five components: Global Operating Network Architecture (GOTA); the Video Surveillance Subsystem (VSS) which is the CCTV component; the Video Conferences System; E-Policing Subsystem and the Emergency Collation Response Subsystem.
In simple terms, the project was to provide audio, video and data information for use by the Nigeria Police Force and other security agencies.
The CCTV, which is the Video Surveillance Subsystem, was less than 15 per cent of the entire project.
It was designed to be financed with a $600 million financing portfolio, which was secured as a soft credit loan, with 3 per cent interest repayable in 10 years, after an initial 10 years of grace.
The China EXIM Bank agreed to offer the facility only in line with the policy of the Chinese government that it had to be tied to specific projects in order to allow them to repatriate a certain percentage of the sum loaned, including interest.
According to the Federal Ministry of Finance, the late Yar’Adua’s administration acted promptly by making a down payment of $70.50 milion, which was the equivalent of 15 per cent of the total contract sum as the government’s counterpart fund.
Thereafter, it signed a Sovereign Guarantee to the tune of $399.5m to enable ZTE to source the loan from the Chinese government.
The Minister of Finance, Hajia Zainab Ahmed, had disclosed that the federal government has been servicing the $600 million loan obtained for the project at 3 per cent as agreed by the Chinese and Nigerian government when the Memorandum of Understanding (MoU) on the project was signed in 2010.
The grace period ended in 2018 meaning that payment of the accruable 3 per cent interest began five years ago.
Confirming this before an ad hoc committee of the House of Representatives, which investigated the failed project, the minister revealed that Nigeria has, in keeping with the tenet of the MoU, been servicing the loan, even though it has since gone under.
“We are servicing the loan, but on the project, we will have to ask the FCT authority because the project was deployed in the FCT,” she said.
However, the minister was quick to add that she had no clue why it failed.
One of the financial experts interviewed, Udo Imowo, a former staff of a first generation bank in Abuja said the $600m facility at 3 per cent annually amounts to $18m meaning that since Nigeria started servicing it five years ago the total amount so far paid to ZTE is $90 million and at current official rate of a dollar to N445, Nigeria has been serving the loan at the N40.05 billion.
“Yes, agreed that the dollar rates have fluctuated annually, but never below $2c00 per Naira since 2018.
“It seems reasonable to me to base the calculation on the current rate which I assume is the rate at which any payment at the international market is done. If there is some downward variation, the differences won’t be much,” he said.
The firm sprang into action and reportedly installed a number of CCTV cameras in Abuja, Lagos and Port Harcourt, among other cities.
In Abuja for instance, the cameras were installed in some 20 strategic locations including the Airport Road, Ahmadu Bello Way, Area 11. Olusegun Obasanjo Road, Life Camp Roundabout, Sultan Abubakar Road, PPPRA Headquarters, NIPOST Headquarters Junction, Tafa Balewa Road, and the Nnamdi Azikiwe International Airport, Abuja.