Chinese Loan: Need For Caution

The Minister of Transportation, Mr Chibuike Rotimi Amaechi, is expected to appear before the
House of Representatives Committee on Treaties on Monday, August 17, 2020, to provide detailed answers on the $500 million loan to be sourced from the Export-Import Bank of China for railway lines in the country among others. To appear alongside the Minister are his Communications and Finance counterparts, Dr Ali Isa Pantami and Mrs Zainab Ahmed respectively, including the Director-General of the Debt Management Office (DMO), Ms Patience Oniha.
Issuing the invitation order on Tuesday, July 28, 2020, the House Committee on Treaties under the Chairmanship of Rep. Nicholas Ossai raised the alarm over alleged waiver of Nigeria’s Sovereignty in the Federal Government’s concessions loan agreement on Nigeria National Information and Communications Technology Infrastructure Backbone Phase II project between the government of Nigeria, represented by the Federal Ministry of Finance (borrower) and the Export – Import Bank of China (lender) dated September 5, 2018.
The Committee specifically cited Article 8 (1) of the agreement which states that “the borrower hereby irrevocably waives any immunity on the ground 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”.
As the nation waits to get clarification on the issues from the federal authorities under legislative scrutiny, not a few strategic stakeholders and other well-meaning groups and individuals have volunteered critical opinions and informed views on the matter.
The main opposition political party in the country, the Peoples Democratic Party (PDP), has berated the Federal Government and the ruling All Progressives Congress (APC) for the development, describing it as offensive and a “reprehensible pawning of our sovereignty to a foreign interest”, adding that “the gambling with our sovereignty amounts to unpardonable treachery against our nation and the future of our generations yet unborn”.
While expressing the view that such stringent conditions in a contractual agreement indicated a loss of confidence on the President Muhammadu Buhari-led administration by the international community, the PDP insisted that the nation cannot afford to cede our sovereignty or mortgage any part of the country under any guise as condition for accessing any loan.
The Socio-Economic Rights and Accountability Project (SERAP) took its reaction a notch further by instituting a legal action in suit number FHC/ABJ/CS/785/2020, seeking “an order of mandamus to direct and compel President Muhammadu Buhari to tell Nigerians the names of countries and bodies that have given the loans, specific repayment conditions, and whether any public officers solicited and/or received bribes in the negotiations for any of the loans and if there is plan to audit the spending of the loans, to resolve any allegations of mismanagement and corruption”.
While SERAP acknowledged that access to loans could provide badly needed resources, the body expressed worry that “the massive and growing national debts have continued to have negative impacts on socio-economic development and on Nigerians’ access to public goods and services, including quality education, adequate healthcare, clean water, and regular electricity supply”.
Accordingly, the view has been expressed in many quarters that Nigerians have, over time, lost confidence in government when it comes to international agreements as exemplified in the on-going case between Nigeria and Process and Industrial Development (P&ID) in which the sum of $9.6 billion is still pending against the country due to an agreement signed by government officials.
According to Dr Reuben Abati, a veteran journalist and former Chief Press Secretary to former President Goodluck Jonathan, “in the case of China, the aforementioned Article 8 (1) refers to such words as “arbitration”, “property”, “enforcement of arbitral award”. These are the same key words in the P&ID case”.
He pointed out that “China helped Sri Lanka to build the port of Hambantota. Both countries signed an agreement similar to the one Nigeria signed with the Export-Import Bank of China. Today, China runs that port with Chinese personnel. “In Djibouti, the Chinese are in charge of the ports too, just because Djibouti borrowed money it could not pay back.
“In Zambia, for similar reasons, China is now controlling the Zambia National Broadcasting Corporation. China is also planning to take over the Zambia National Electricity Corporation. “There have been issues as well with China’s relations with Kenya, Democratic Republic of Congo and other African countries”.
While The Tide acknowledges the huge deficit in critical infrastructure in the country, the lack of desperately needed resources to address the situation and the acquisition of loans from willing creditors as a veritable source of finance, concession agreements with clauses that could further encumber our already distressed economy and put the socio-economic wellbeing of present and future generations of Nigerians in jeopardy should be outrightly rejected.
This is why we agree with well-meaning Nigerians that the explanations by the Federal Government through the Attorney General of the Federation and the Minister of Transportation that Nigeria’s existence as an independent nation with full authority of self-determination is not at risk in the country’s loan agreement with China gives very little comfort, consolation and confidence.
The Tide insists that the China loan agreement, and indeed every other loan agreement entered into on behalf of the Nigerian people by the Federal Government and other international bodies, should be critically reviewed with a view to identifying and expunging clauses and articles that could hurt the country, even as we urge the central administration to ensure that only competent and patriotic hands are engaged to sign international agreements on behalf of the country.