…back Reps’ position on threat of clauses
Uncertainty and bewilderment continue to trail the alarm raised by the House of Representatives on Tuesday over certain clauses in the loan agreement between Nigeria and China in the event of a default in the loan agreements totalling $400 million, which was signed in 2018.
Saturday Telegraph gathered that the development arose following some lethal clauses in Article 8(1) of the commercial loan agreement signed between Nigeria and the Export- Import Bank of China, which indirectly “wills the sovereignty of Nigeria” in the $400 million loan for the Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase II Project, signed in 2018. While the development had raised some pertinent questions as regards its legality or otherwise, many Nigerians, who spoke on the issue, including some frontline sociocultural groups, dismissed such an untoward move by the Federal Government.
They also argued that such move portends grave danger for the entity called, “Nigeria and the generation yet unborn”, since the current dispensation might not be avail to explain and redress whatever anomalies that may arise in future. Saturday Telegraph spoke to prominent stakeholders, frontline socio-cultural groups such as Ohanaeze Ndigbo, Afenifere, financial analysts, among others, with many expressing fear of terrible consequences in the event that there is a loan default.
Recall that the Chairman of the Committee, Rep Ossai Nicholas Ossai, had on Tuesday during an investigative hearing into some of the agreements signed between Nigeria and China, raised the alarm over lethal clauses in Article 8(1) of the commercial loan agreement.
During the session, where the Minister of Transport, Mr. Rotimi Amaechi, had equally responded to various questions on the ongoing modernisation of railway projects being implemented by the Federal Ministry of Transport, Ossai alleged that one of the agreements in contention, which was signed by the Federal Ministry of Finance (Borrower) on behalf of Nigeria and the Export-Import Bank of China (Lender) on September 5, 2018, clearly “showed that Nigeria was on the verge of been ceded to China in the event of default in the loan repayment.”
He said Article 8(1) of the agreement, reads: “The Borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.” In the wake of this, Amaechi on Wednesday, explained that the clauses in Article 8(1) of the commercial loan agreements were only a ceding sovereignty for asset recovery. Speaking with journalists during the assessment of resumption at the Idu- Abuja railway station, Amaechi said the clause was not ceding the nation’s sovereignty in the technical sense but providing some relief to enable China to take over assets for loan recovery if and when necessary.
He said: “I have told the House of Representatives that it is a clause in the loan agreement. Like the loan for the construction of Ibadan to Kano rail is $5.3 billion, the implication is that if we can’t pay the money, whatever they need to take from us they would without us talking about our sovereignty.”
FG joking with Nigerians- Ohanaeze
Ndigbo Reacting to the issue, pan Igbo socio-cultural organisation, Ohanaeze Ndigbo, took a swipe on the Federal Government for its consistent effort to mortgage the future of Nigeria through foreign loans. The group also declared that the endless acquisition of foreign loans and rising debt profile was an indication that the Federal Government was taking Nigerians for a ride. Speaking to Saturday Telegraph on the development, the Deputy National Publicity Secretary of Ohanaeze Ndigbo, Mazi Chuks Ibegbu, said those in power were joking with the destiny of the nation. Ibegbu said: “There is a clear evidence that this men in the corridors of power are joking with our destiny. “Nigerians must scrutinise all such deals and save themselves from this second slavery.
These men in corridors of power think we are fools. Nigerians must now take over their country and save themselves from these agents of neo colonialism in Aso Rock (State House, Abuja).” Afenifere berates Amaechi On its part, pan Yoruba socio-political organisation, Afenifere also expressed dismay over the comments made by the Minister of Transportation, Mr. Rotimi Amaechi, on the issue. While describing the scenario as unfortunate, the National Publicity Secretary of Afenifere, Mr. Yinka Odumakin, said the minister was not concerned if the territorial integrity of Nigeria was compromised or not. Odumakin said: “It is unfortunate that a minister who because he wants money will not mind whether the territorial integrity of Nigeria is compromised.
“We know what has happened to Gambia. We know what happened to other countries that secured this kind of loans and had their territorial integrity compromised where the Chinese have virtually taken over all their countries because they never cared the way Amaechi is not caring about the territorial integrity of his country, they just wanted cash. “It is good that the House of Representatives made their observation on the conditions attached to these loans clearly so that we don’t sell our country into slavery.”
NASS should be carried along – ACF chieftain
The immediate past Secretary General of the Arewa Consultative Forum (ACF), Mr. Anthony Sani, however called on the Federal Government, ministries, agencies and parastatals to always carry the National Assembly along in signing contractual agreements for the country. Sani said even though the minister had explained that the sovereignty is not on the country but on properties, the national assembly should be carried along. Sani said: “The Minister of Transport, Mr. Rotimi Amaechi, has clarified that the clause on the said $400 million contract has to do with ceding sovereignty on properties and not sovereignty of the nation. “But the National Assembly is not wrong when it posits that such contracts with foreign nations that touch on sovereignty of the nation should put the National Assembly on the know lest the future of next generations be compromised unduly.”
Loans quite regrettable -Middbelt leader
The convener of the Middlebelt Patriotic Front (MPF), Mr. Ibrahim Bunu, has described as unfortunate and regrettable, the recent statement by the Minister of Transportation, Mr. Rotimi Amaechi, that China would not approve Nigeria’s request for loans if the National Assembly continues to probe the loan agreements the country had with the lenders. He added: “China wants to come and colonise Nigeria and I don’t see a reasonable government that will accept that in this 21st century. “Nigeria needs to be careful when collecting loans if not one day they will take over our oil in place of their loans. We condemn and discourage government that will continue collecting loans from China.”
Experts: It’s no threat to Nigeria’s sovereignty, but…
Financial analysts have dismissed concerns raised by Federal lawmakers that loan agreements being entered into by the Federal Government with China, could result in Nigeria ceding some of its sovereign authority in the event that the country defaults on the loan. However, the analysts are urging the government to always ensure that it involves highly knowledgeable experts in loan negotiations with China so that the country can derive maximum benefit from them. However, reacting to the development, the Chief Executive Officer, BIC Consultancy Services, Dr. Boniface Chizea, said the lawmakers used a, “wrong choice of words” when they claimed that the clauses in the loan agreements could lead to the country losing some of its sovereignty due to the Chinese loans.
He said: “Literally speaking you cannot sign off the sovereignty of any country. It is not a chattel that you can transfer ownership based on some agreements. All who go to China to ask for loans must be familiar with their terms by now. “They don’t vary in any material details.
The terms are as constant as the Northern Star! The loans conditions are soft. The repayment period is long. The interest rates are borrower friendly always low single digit and there is often attached long moratorium be-fore repayment kicks in.
“But the Chinese will handle the construction using top of the class technology. They will not allow you to handle any aspects of the project. There citizens will work on the project and they will handle literally all input. And that for them is value adding. “It is left for the borrower to ensure that the assumptions and terms are not weighted against him. But if you default and it could not be remedied, the Chinese takes over and runs the business on commercial terms to recover their money or for that matter takeover and have ownership permanently transferred. But it is not conceivable that the project will be relocated. And therefore the benefits still accrues to your environment.
Is that now what is being referred to as selling off our sovereignty?” He said: “Loan agreements are of a technical nature and not something that our legislators should overly dabble into. We must give the benefit of doubt to our experts to act in our best interests. And whenever they don’t as a deterrent there must be consequences. Also, a Professor of Finance and visiting Professor of Forensics, Copper Stone University, Zambia, Prof. Richard Mayungbe, rejected the lawmakers’ concerns. He said: “It is like medicine after death. We should not politicise everything.
Instead of doing their job before the loan agreement was sealed, they are now waking up to complain about some of the clauses. “What the clause they are referring to is saying is that if the country guaranties a loan for a particular project and defaults on the repayment plan, then it would waive its rights for a period over the ownership of the project.” However, commenting on the issue, a former President of the Association of National Accountants of Nigeria (ANAN), Dr. Sam Nzekwe, said while the loan deals do not literally amount to Nigeria ceding some of its sovereign authority, the terms of the agreements are overwhelmingly in favour of China.
He said: “I questioned the terms of the agreement at the time they (government) announced the initial loan to improve the railway system. Apart from giving you the loan, which comes with high interest rates, China will bring virtually all the equipment, including bolts and nuts, that would be needed to complete the project.
“In addition, China will also bring in all the engineers and other staff that would work on the project. Nigeria actually loses a lot by such agreements and that is why I have always urged the government bring in experts to look at the terms before the deal is sealed.”
Lawyers: We should scrutinise loan viability
Some senior lawyers also expressed their displeasure over the alleged ceding of Nigeria’s sovereignty to China over a loan facility. In separate telephone chats with Saturday Telegraph, the lawyers demanded a thorough scrutiny of the loan facility offered to Nigeria by China, which reportedly led to the ceding of its sovereignty as alleged by the House of Representatives. Speaking on the issue, a Senior Advocate of Nigeria (SAN), Dr. Biodun Layonu, asked the National Assembly to invite the Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami (SAN), for questioning. He said: “On the issue of ceding of the nation’s sovereignty to China over a loan arrangement, I think Nigeria’s legal team headed by the Attorney General of the Federation (AGF), Abubakar Malami (SAN), has to offer some explanations in this regard.
“Now that concerns have been expressed as to what this loan from China represents, it is for the AGF as the head of the Nigerian legal team to offer explanations on the whole issue.” Commenting also, a former Secretary of a the Nigeria Bar Association (NBA) Taskforce, Mr. Kunle Adegoke, expressed concern over the loan facility taken by Nigeria from Chin. Adegoke said: “It is certain that China is out to colonise third world countries that are taking loans from it. One is really disturbed if Nigeria actually needs these loans we are taking from China in view of all the funds being embezzled and stolen by public officers in Nigeria.
“The amounts devoted to the Niger Delta Development Commission (NDDC) and stolen by politicians alone are sufficient to build the infrastructures which China is now building for Nigeria based on debts the terms of which are not preserving our interests as a nation.” On his part, a former President of the Committee for the Defence of Human Rights (CDHR), Mr. Malachy Ugwummadu, called for a review of the loan agreement with China which had allegedly resulted in the ceding of the nation’s sovereignty.
He said: “It is extremely curious to hear that state actors signed documents or instruments ceding the sovereignty of Nigeria to another sovereign nation in the name of contract. “It actually sounds treasonable and reckless to say the least in the event that it was an inadvertenance. Such agreement founded on fraud or misrepresentation must be reviewed or revoked.”
A rights activist, Mr. Ige Asemudara, condemned the alleged ceding of Nigeria’s sovereignty to China in the name of a loan facility. Asemudara said: “Let me quickly comment on the House of Representatives sudden discovery in one of our bilateral agreements that our sovereignty was ceded to China. It is an unfortunate incident. That is the kind of result you get when illiterates are put on the nation’s driver’s seat. “It is an ominous sign that this regime set out to deliberately deliver this nation to other nations.
Some of these loans were obtained even before the National Assembly approved them. They continue to steal and loot the loans that is why they usually rush to obtain them. They have no single interest of our nation.” APC: Ministries, AGF’s office to explain better The All Progressives Congress (APC) has said the ministries involved in the signing of agreement for the $400 million loan and Minister of Justice and Attorney General of the Federation (AGF), Abubakar Malami (SAN), would be in better position to explain the terms of the agreement entered with the lender of the loan (China) with Nigeria. The APC Deputy National Publicity Secretary, Yekini Nabena, who stated this in response to the loan controversies, said the party was not in any position to react to it. According to him, the information of the loan and the implications should come from the ministries of Finance, Communications, Transportation and Justice. He said: “The APC would not be in the position to speak on the loan or the implications to the Sovereignty of Nigeria.”
We’ll comment later-PDP
National Publicity Secretary of the Peoples Demopcratic Party (PDP), Mr. Kola Ologbondiyan, when contacted by Saturday Telegraph, said the party would react at the appropriate time. He said: “The party is studying the document and will react at the appropriate time.”