The House of Representatives on Monday faulted the sovereignty clause in Nigeria/China loan agreement, saying the sovereignty clause is dangerous.
This was stated in Abuja by the Chairman of the House Committee on Treaties, Protocols and Agreements, Nichola Ossai, during the investigative hearing on external loans and commercial agreements. Ossai added that Nigeria’s loan agreement with the Asian country was only being governed by Chinese laws.
He added that the Federal Government of Nigeria in 2014 signed an Executive Order providing guidelines on waiver of sovereignty immunity during loan and commercial agreement negotiations, however, Nigerian officials have been violating the order.
Members of the executive who appeared before the investigative committee were the Minister of Transportation, Rotimi Amaechi; Minister of Works and Housing, Babatunde Fashola; Minister of Communications and Digital Economy, Ali Pantami; Minister of Police Affairs, Muhammad Maigari; and Minister of the Federal Capital Territory, Mohammed Bello.
Others included the Director-General, Debt Management Office, Patience Oniha; Permanent Secretary (Special Duties in the Ministry of Finance), Aliyu Ahmed and Director, Legal Services, Gabriel Christopher, both representing the Ministry of Finance, Budget and National Planning.
In his opening address, Ossai stated that the controversial clauses and agreements had been existing before President Muhammadu Buhari-led government. He added that the probe was not about the ruling All Progressives Congress or the People’s Democratic Party.
He made it known that the lawmakers’ probe was not limited to Chinese loans and commercial contracts. He said, “We will like Nigerians to know that we are not focusing on only Chinese loans. From what we know, Nigeria has over 500 bilateral loan/commercial contract agreements and investment treaties with different countries and institutions. There is no way the committee will do a thorough job without segmenting the issues based on countries, institutions or MDAs.
“The loan agreements we have seen so far show that government officials charged with the responsibility of representing Nigeria in these issues are more desperate to just take the loans at any condition, possibly using non-negotiated loan agreement templates rather than go through the rigour of diligent technical review of negotiating specific clauses with clarity and for national interest.”
He committee chairman noted that it was a common practice that most international loan agreements would adopt ‘sovereign guarantee’ and a neutral international arbitration centre.
He noted, “Even in situations where countries, out of desperation and weak economic position, waive their national sovereignty in bilateral or contractual agreements, the immunity of sovereignty waiver clause will usually be clear and categorically state-specific assets associated with the loans for takeover in the event of default.
“However, the immunity clauses in most of these agreements before us are not only ambiguous but also very obscure and without recourse, to the fact that the Nigerian government had issued a circular on the subject matter with Reference Number SGF/OP/1/S.3/X/1739, dated 11th August 2014, which is an Executive Order, that provides guidelines on issues of waiver of sovereign immunity clause during loan and commercial agreement negotiations.”
According to him, the international standard for arbitration centres for bilateral loan agreements are generally known to be neutral places, “unlike what we have in most of the Nigeria/China agreements where Hong Kong that is also governed by China laws was designated as the arbitration centre.”
He explained that Nigeria government agencies sign commercial agreements in billions of dollars before going to the Federal Executive Council for approval to execute them.
Adding that they proceeded to negotiating the terms of the loans before returning to the President, who would be asking the National Assembly for approval for billions of dollars to do projects without attaching the negotiated loan and commercial contract agreement details.
