China Eximbank provides $399.5 preferential buyer’s credit for Nigeria National Public Security Communication System Project

Project narrative

On August 7, 2010 the Government of Nigeria signed a $470 million commercial contract with ZTE for the Nigeria National Public Security Communication System Project. Then, on December 20, 2010, China Eximbank and the Government of Nigeria signed a $399.5 million preferential buyer’s credit (PBC) agreement for the Nigeria National Public Security Communication System Project (NPSCS). The proceeds from the PBC were used to finance 85% of the cost of the commercial contract with ZTE. The Government of Nigeria agreed to fund the remaining 15% ($70.5 million) itself. The PBC carried the following borrowing terms: a 20 year maturity, a 7 year grace period, and a 2.5% interest rate. The final maturity date of the loan is September 21, 2030. As of December 31, 2020, Nigeria’s Debt Management Office (DMO) reported that the China Eximbank PBC (loan) had achieved a 100% disbursement rate ($399.5 million) and the borrower had made interest repayments worth $89.04 million and principal repayments worth $92.19 million to the lender. As such, the loan’s (principal) amount outstanding, as of December 31, 2020, was $307.31 million. The Nigeria National Public Security Communication System Project had five subcomponents. The first subcomponent was a Global Open Trunking Architecture (GoTa) Sub-system, which is a CDMA-based voice and data telecommunications system with national coverage that operates through Mobile Switch Centers (MSCs) in Lagos and Abuja, 12 Base Station Controller (BSCs), 675 Base Transceiver Station (BTSs) and 21 Microwave repeaters. The GoTa system supported the deployment of 1.5 million subscriber lines. The second subcomponent was Video Surveillance Subsystem, which involved the installation of approximately 2,000 solar-powered CCTV cameras in Abuja and Lagos. The CCTV cameras were reportedly installed to monitor and reduce criminal activities including attacks, kidnappings and killings. The third subcomponent was a Video Conferencing Subsystem, which provided a platform for real time video conferencing for the Nigeria Police Force across all commands and the Force Headquarter. The fourth subcomponent was an E-policing Subsystem, which facilitated the deployment of E-policing databases. The fifth subcomponent was the Coalition Emergency Response subsystem, which provided a platform for national emergency communication using the short code of 911 for emergency and distress calls and 912 for anonymous security information. This subsystem also reportedly enabled the carried the security agencies to carry out coordinated responses. This project commenced in 2011 and it was completed in 2012, but its precise completion date is unknown. It has, however, been plagued by controversies and various problems. In 2011, Nigeria’s House of Representatives investigated compliance with due process in the award of the contract and the execution of the project by ZTE Corporation. In 2014, Nigeria’s Federal High Court ordered the Economic and Financial Crimes Commission to investigate if there was corruption in the contract awarding process. Then, in 2019, Nigeria’s Federal High Court approved the Socio-Economic Rights and Accountability Project to investigate the Federal Government’s use of the loan proceeds. After the completion of the project, the communication network laid idle for many years because of the high cost of administering and maintaining it. The network was also badly vandalized. In reference to the Video Surveillance Subsystem, the News Agency of Nigeria (NAN) has reporting that ‘virtually all its infrastructure had been removed or destroyed by motorists through accidents.’ In 2018, Nigeria’s federal government announced plans to revive the National Public Security Communication System, including the vandalized CCTV cameras in Abuja and Lagos.