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For Amaechi, Chinese loans come first
Following the discovery of a nebulous clause in a 2018 loan agreement for the sum of $400m, which is interpreted to cede part of Nigeria’s sovereignty to the China Export-Import Bank should the country default, Minister of Transportation, Rotimi Amaechi, has repeatedly opened his mouth and put his foot in it.
The commercial loan agreement signed on September 5, 2018 was for the Nigeria National Information and Communication Technology Infrastructure Backbone Phase II Project, but Mr Amaechi’s stake in the affair concerns a loan his ministry hopes to secure by December this year for the completion of certain railway projects.
He has also been summoned by the House of Representatives to provide details of the loan he hopes to secure on behalf of the country.
On July 29, the minister reportedly urged the House to pause its investigations until his ministry had secured its own loan.
He said, “My fear is that if this probe continues, at the end of the day, some sections of the country may suffer. In oversighting, there is what is called national interest.But in asking questions on these loans now, it may jeopardise these loans.
Let the Government of China not say there is a disagreement in the government on this loan and so we will not give this loan.
So, I appeal to the chairman to give us from now till December when we are likely to secure the loans. Then, from January, February, you can resume this investigation.” Really? Could this poor rationalisation come from a public official?
The controversial clause in the 2018 deal, Article 8(1) 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.”
Asked his thoughts on the problematic clause in the loan deal, the minister said: “It’s simple. The loan to construct the rail from Ibadan to Kano is $5.3bn. It is not that we’re ceding the sovereignty; you can’t take away the sovereignty of Nigeria.
The implication is that ‘if at the end of the day you don’t pay us back our money, whatever we need to take, we will take from you without you telling me about sovereignty.’ But most times what the Chinese do is that they go after the same asset that they have constructed to recover their money. So what’s wrong with that? You are asking for $5.3bn and they say just waive the sovereignty.”
He went on to refer to the legislature as wise men, and ominously pointed out that they would jeopardise the ability of the executive arm of government to raise money if they continued with this curiosity, for it would make the Chinese and the Russians, from whom they hoped to secure more loans for more projects, apprehensive.
Continued Mr Amaechi, “Are they saying that we should lose these loans because they are asking whether it is right to cede sovereignty? It is not ceding sovereignty in the technical sense of it, it is ceding sovereignty giving them the power to recover their assets if they need to recover it to be able to recover their money.
So I don’t see what is wrong with that.” Is Mr Amaechi blind? Could he predetermine what assets the Chinese would impound in the case of default? Does he not feel mortified that he had engineered a suspicious contract upon Nigeria, one which he probably never properly scrutinised in the government’s obsessive hunger for loans and more loans?
The minister has at least seen the 1999 Constitution of Nigeria, Section 2 of which enshrines the indissoluble sovereignty of the country. No loan therefore should purport to even lease the sovereignty of Nigeria to another country, or a bank in that other country.
Nigerians have, through the legislature and the media expressed fears concerning the details of the contract that secured the loan. All the parties responsible for the acquisition of the loan(s) in dispute have been summoned to explain these confusing terms, yet the minister carries on like he appointed the people for the country and not the other way round, and that securing the loan takes pre-eminence.
Mr Amaechi has tried to justify the Federal Government’s loan-happy financial roadmap by pointing out the juicy interest rates, time lengths and moratoria in the loan contracts.
Does he believe it is wiser and more sustainable to indebt future generations of Nigerians by taking loans to execute projects than to establish, fund and task national think-tanks to conceive ways to deploy the country’s underutilised resources for infrastructural development? His narrow-minded deference to the liberal acquisition of loans is a reflection of the lamentable policy formulation of Nigeria’s over-expensive and lavishly-maintained government, which has not held back its penchant for indebting the country’s future and mortgaging its territories.
No one wants to cede their inheritance not for a pot of porridge, nor for any loan , and Nigeria’s territorial integrity is part of her inheritance.
It may well be that the loan agreement does not actually violate the country’s sovereignty, but until that is proved, he has no business asking the legislators to suspend investigations pending when he can secure fresh loans, which will push Nigeria’s debt profile further than its $27bn 15-year high, and which no one is sure will not worsen whatever damage is feared to have been done to the country’s sovereignty.
For Amaechi, Chinese loans come first