Loan: Crisis Hits Reps Panel, Ministry Summoned Over Sovereignty Clause

The House of Representatives Committee on Treaties, Protocols and Agreements has invited the Ministry of Justice to shed light on the sovereignty clause in Nigeria’s loan agreement with China.

The Chairman of the committee, Nicholas Ossai, disclosed this on Tuesday at the sitting of the panel, which is investigating external loans and commercial agreements signed by Nigeria.

Also on Tuesday, there were indications that the committee members were divided as some of the lawmakers faulted the approach of the chairman.

It was gathered that some members felt that the chairman was going to an area that did not concern the panel.

The PUNCH learnt that such lawmakers included members of the Peoples Democratic Party, who feared that the manner the probe was being conducted would expose deficiencies in loans the PDP governments took when the party was in power between 1999 and 2015.

Ossai digging into issues beyond his mandates – Aggrieved lawmaker

An aggrieved member, who spoke to one of our correspondents on condition of anonymity after the committee sitting, said Ossai was digging into issues beyond his mandates.

The lawmaker said, “Was he asked for oversight transport/works/ICT committees? The referral is about the contents of agreements. If they are inimical to our wellbeing and our overall sovereign interest, the proper person to invite is the AGF (the Attorney General of the Federation (Abubakar Malami, SAN). He did not call him.

“All the directors of legal services of all the ministries, departments and agencies are (members of) staff of the Attorney General of the Federation office. Why didn’t he (Ossai) call the AGF?

“When Mr President sent a  request for loan approval, it was referred to the Committee on Loans Aids and Debt (Management). The committee brought its report, including the agreements and terms. It was discussed and approved by the Committee of the Whole. So, is Ossai now investigating the decision of the entire House and by extension the National Assembly too? Even most of the loans were taken by the PDP.”

I won’t stop the probe, we must renegotiate dangerous clauses – Ossai

But speaking to one of our correspondents after the committee’s short sitting on Tuesday, Ossai vowed to continue with the probe and conclude it.

Ossai said, “On Tuesday (next week), we are meeting. I will not soft-pedal on this issue. I’m going all out. To me, I feel Nigerians should be protected. Those clauses, we must make sure today they are renegotiated. We cannot say because you want to take loans, you will hold Nigerians by their jugular.

“Even when we approve loans, the second arm of the passage is a prayer that they will bring the details of those agreements to the National Assembly, which they have never brought.”

The chairman had on Monday described the sovereignty clause in the Chinese loan as dangerous.

At Monday’s sitting, a member, Oluwole Oke, disagreed with Ossai.

The Federal Government had on Monday confirmed the controversial clause relating to the sovereignty of Nigeria.

According to both the Federal Ministry of Finance, Budget and National Planning, and the Ministry of Transportation, the clause is a global standard in bilateral agreements.

The committee, at its sitting on Tuesday, suspended its investigative hearing till Tuesday.

Ossai, who led members of the panel into the venue about one hour behind schedule, called for the adjournment after the opening prayers.

Ossai said the lawmakers needed to scrutinise the documents already presented to the committee, while the panel would also demand explanations from the Federal Ministry of Justice.

He said, “You are aware that I, as the chairman of this committee, will not ambush my colleagues in terms of new documents submitted. We need to digest most of these documents and go through the documents clause by clause.

“There is also an important office in this country that has been part of the negotiating team, which is the Ministry of Justice. The Ministry of Justice has been reached. They need to be part of this because of the revelations that are coming up now on most of these clauses. And these are the people who were supposed to have seen the clauses embedded in the documents. So, we also need the Ministry of Justice to be able to interface with them.

“More importantly, we also need the Minister of Finance, who was supposed to be here. The ministry signed most of these agreements with other countries.

“So, I am seeking the indulgence and the permission of my committee members to begin to look at this issue and probably adjourn for one week, to enable us to digest this matter and re-invite the honourable ministers that are here and those that are not here, so that we can conclude this matter as soon as possible so that we can make our recommendation to the National Assembly.

The committee, therefore, resolved to adjourn till Tuesday.

Meanwhile, ex-diplomats, economists and financial experts on Tuesday disagreed over loans Nigeria obtained from China for rail projects.

While some of the experts allayed fear over sovereignty clause in the loan, others said Nigeria should be careful when taking Chinese loans.

In an interview with The PUNCH in Lagos, an economist and Chairman of the Foundation for Economic Research and Training, Prof. Akpan Ekpo, said Nigeria should be extremely careful when taking Chinese loans.

On his part, a former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said there was a preference for Chinese loans because they were cheaper, easy to get but lack transparency.

He said,  “Chinese people are not like American people who look into the activities of the country to make sure there is no fraudulent activity there.

“If America or the World Bank is giving you a loan, they want to make sure the amount is correct and make it difficult to do back-hand business.

“But the Chinese government does not care, what they know is that they want to continue to grow their economy.

“American or European countries ensure they do clean transactions, that is why they don’t want to go there and borrow because they will prescribe ethical steps you must pass to get the loans.”

No law permits China to seize govt institutions, says Bolaji Akinyemi

But a former Minister of Foreign Affairs, Prof. Bolaji AKinyemi,  said no international law permitted China to seize any Nigeria’s institutions on account of default in loan repayment.

Akinyemi, who spoke in an interview with a French video-sharing technology platform, Daily Motion, however, faulted the use of the term sovereignty clause by the Federal Government, saying immunity was preferable.

He explained that conditions usually attached to Chinese loans were not different from those given by other countries in America and Europe.

Akinyemi said Africans should be outraged that their leaders always took loans they knew ab initio that they would not repay.

He said, “People who grant you those loans must also know that they can get the money back one way or the other. If they grant you loan forgiveness or debt re-schedule meant, it is probably because they will ask you when you are negotiating at an international conference for your votes.

“But there is no way they will reschedule your loan or grant you loan forgiveness for nothing.”

He noted that the world started making a distinction between sovereign and economic immunity after Russia, upon assuming control of many companies, claimed sovereignty for its business interests.

Akinyemi said sovereign immunity could only apply to political relations and diplomacy.

He stated, “But when it comes to economic relations, trading, buying and selling, contracts, etc, you cannot claim sovereign immunity for them or else you will be putting your partner at a disadvantage.

“That is what Africans and developing countries should keep in their minds that in the realm of economic relations, you cannot claim immunity even though your state is a party to that contract. That is what this debate is all about.

“I think it is a pity that in the particular contract we are talking about, the term sovereign immunity was used. If I were the minister in charge of that project, I wouldn’t use that term. I would simply say you cannot claim immunity when it comes to repayment of your loans. You cannot claim immunity when there is a disagreement.

“It is interesting that the Chinese foreign ministry has issued a statement that Nigeria’s sovereignty is not at stake in this matter. I am not familiar with the terms of their contract with other African countries, but there is no international law that will permit China to march into any African country and seize any institutions of government. But if it is in the contract, which with their eyes opened they signed, then that is a different thing,” he added.

On his part, a former Nigerian Ambassador to Angola, Amb. Folorunso Otukoya said the sovereignty clause was nothing more than collateral or guarantee protecting China’s interest in the loan transaction with Nigeria.

He said, “What they are calling sovereignty clause is nothing more than collateral, it doesn’t mean they (China) would come and rule Nigeria.

Also former Nigerian envoy to Argentina, Amb. Chive Kaave, also dismissed fears that Nigeria might have been sold off to the Asian giant, noting that the United States which was the highest debtor to China had not been taken over yet.

Lawmakers probe failed $500m Nigerian satellite contract, N180m insurance

In a related development, the House has begun an investigation into the N180.9m insurance premium allegedly paid for the failed NigComSat 1 launched in 2011 as well as Satellite 1-R. Nigeria obtained $500m Chinese loan for the failed NigComSat 1.

The Committee on Insurance and Actuarial Matters, on Tuesday, gave the management of NigComSat seven days to submit all documents on the insurance of the satellites.

The Chairman of the committee, Mr Darlington Nwokocha, at an investigative hearing in Abuja on Tuesday, quizzed managements of two insurance firms–Fasahal Insurance and A & G– engaged by NigComSat, over alleged irregularities as well as their engagements without due process.

Nwokocha noted that the committee’s investigation was based on six petitions filed by concerned Nigerians in the insurance sector and some workers in the organisations.

The lawmaker stated that the probe was to detect the alleged infractions, impunity, contract racketeering and financial recklessness concerning the satellites.

Members of the committee, in their separate remarks, decried the alleged blatant breach of extant regulatory laws, while demanding relevant documents on various transactions among the parties.

The Managing Director/CEO of NigComSat, Mr Abimbola Alale, while speaking on the appointment of the lead insurance company, stated that the Chinese company that manufactured the satellites unilaterally nominated the United Kingdom-based firm to insure NigComSat 2, which was launched in 2014.

Also, the Legal Adviser, NigComSat, Mrs. Alina Okpalefe, who said she was the Secretary of the Project Committee, said no lawyer accompanied the delegation to China where the contract was sealed in  2011.

The Managing Director of Fasahal Insurance, Mr Frederic Adejo, in his presentation, said NigComSat introduced him to the lead insurance firm.

Adejo disclosed that N180,992,836.35 was paid as premium in 2014.

The Managing Director, A & G Insurance, Mr Abiola Ajibowu, told the lawmakers that all relevant documents required by the committee had been transmitted. He also stated that the only evidence of the contract was the policy document, which contained the value of the asset, premium paid and the period of the insurance policy.

The committee, consequently, demanded bank statements on all the transactions and schedule of the insurance policy.

By Nike Popoola, Leke Baiyewu, Adelani Adepegba,Samson Folarin and ’Femi Asu