Sovereign Immunity Clause in Loan Agreement was not inserted by Rotimi Amaechi: Leave Him Alone

Early this week the Honorable Minister of Transportation and his colleague in Ministry of Finance were summoned by the House of Representatives to explain the loans so far taken for the construction of the Railways in Nigeria. Ordinarily, one would expect that the purpose was to verify whether the projects were going according to specifications and timelines; there was any financial improprieties in the payment process, or there was any case of corruption as it were in procurement process of the contractor.

Quite surprisingly, what played out in the proceedings was more of a deliberate effort by the Chairman of the Committee, Hon. Ossai Ossai of the Peoples Democratic Party (PDP) representing Delta State to find faults as opposed to having free flow of communication, ether through a properly coordinated “question and answer” approach or presentation approach. The Chairman tried so hard to prevent the Hon. Minister of Transportation from speaking to Nigerians while at the same time he tried to put out false information to Nigerians through innuendos.

At the end of that proceedings, the Chairman through his many innuendos deceptively put out a wrong notion that the sovereignty of Nigeria was under any form of danger. Before I continue let me state a bit of my experience. I am a retired Civil Servant with the Federal Ministry of Justice (FMOJ) where I worked for 35 years, having retired in 2018. Out of time in the FMOJ, eleven years was spent in Legal Drafting Department while the rest of the time was in International and Comparative Law Department. I make bold to stated that in Multinational Contracts especially those involving States (Countries), it is a normal and standard practice to include Sovereign Immunity Clause which requires either or all of the parties to the contract to waiver their sovereign immunity.

The whole essence it to enable the parties execute judgement awards in the event of any arbitration or litigation. Throughout my stay in FMOJ, I can confirm that the Federal Republic of Nigeria FGN entered into over fifteen agreements in which the sovereign immunity of FGN was waived. Just last year, the Lagos State Government entered into a contract with China Railway Constitution Corporation International (CRCCI) Nigeria Limited and Huawei International Co. Limited for the installation of 5G in the name of Lagos Smart City Project. In that Contract, the sovereign immunity clause was not left out.

The allegations that the Mr. Rotimi Amaechi, Honourable Minister of Transportation has sold Nigeria to China is therefore baseless. Also, the Railway projects are covered by a contracting model known as EPC +F (Engineering, Procurement and Construction plus Finance). It obvious that: 1. The Members of the Treaties Committee appeared to have overlooked the fact that the said Loan Agreement was signed in December 2010, at which time the former President Goodluck Jonathan was still at the helm of affairs in Nigeria. If I guess rightly, the Hon. Minister of Transportation was yet a Governor in Rivers State. 2. The China/Nigeria Loan Contracts were usual negotiated and signed between the Ministry of Finance (MOF) (on behalf of the FGN) and the Chinese Government, NOT the Ministry of Transportation (FMOT) 3. Every Contract signed by an Ministry on behalf of the Federal Republic of Nigeria, including the FMOT is usually vetted and approved in writing by the Ministry of Justice and the Office of the Attorney General of the Federation, Rotimi Amaechi could not have signed any agreement without approval.

4. The Minister of Transportation signs the EPC Contract with the Chinese Contractor whilst the Minister of Finance signs the Loan Contract with Chinese Government/Bank 5. The FMOT is responsible for the EPC component of the Contract which is implementation. MOF is responsible for the Financial component of the Contract. Therefore it is the Ministry of Finance that is in charge of payment under the Chinese Loan Agreement. The procedure under the Contract is for the FMOT to issues certificates of work done to MOF; and MOF issues it’s confirmation of work done to the Chinese Bank which then pays directly to the contractor. The fund never passes through the FMOT. 6. The Contact sum for the contract in question is about $850million, Nigeria borrowed $500million and paid the balance as counterpart funding. My worry are: why was it difficult for the Committee to realize that the said Contract for the Loan of $500million was signed in 2010, long before Mohammadu Buhari became President?

Why is it difficult for the Committee to place the fact correctly that the Hon. Minister of Transportation is neither the President of the Federal Republic of Nigeria that is calling the shot, the Federal Executive Council that gave the approval nor is he the Federal Ministry of Finance that is in charge of the Loan Contract? What is most worrisome to me is where was the Rt. Hon. Gbahabianila’s led House of Representatives when the Federal Government of Nigeria took Chinese Loan to construct Lagos-Kano Railway, the Abuja-Kaduna. During the construction of the Lagos-Ibadan section, the Hon. Minister for Transportation and indeed President Buhari were lauded; Rotimi Amaechi did not intend to sell Nigeria then.

But today that the development of Railways has turned to the South Eastern and South Southern parts of Nigeria, suddenly the sovereign immunity clause in a 2010 Agreement has become a reason to stop the loan. If I may ask the Committee and their sponsors, is the sovereign immunity clause not in the Loan Contract that enabled the FGN obtain loan for the construction of the Lagos-Ibadan Rail-line? Yet the funds for the repayment of these loans are from the region about to be deprived.

It is even most painful that at the centre of this conspiracy to deny the old Eastern bloc of development are people of that region, all in the name of politics. They think that if they stop the development in the region, Amaechi would be blamed for not attracting development to the region. That is an implausible thinking that is neither here nor there. If the eastern region despises Rt. Hon Chibuike Amaechi for not attracting development to it, another region will applaud him for doing so. When another administration comes the South South and SouthEast would be racing behind the other regions to catch up. May I conclude by calling on the House of Representatives to leave Rotimi Amaechi alone to concentrate on the President’s mandate to him, i.e. building a functional railway network for well-being of the less privileged who would use the Trains.

The Honourable Minister has sold himself to Nigerians as a beautiful bride. Nigerians have seen his drive, dexterity and capacity in getting things done. Therefore, if there is any clause in the Loan Agreement which the House considers inappropriate, it should take it up with the Ministries of Finance and Justice. I call on every member of the House of Representatives from the South South and SouthEast to support the efforts to Hon. Rotimi Amaechi to develop the Eastern Rail-lines. It is the rightful thing to do; equity and good conscience support same. Again, leave Rotimi Amaechi. Paul E. Ajogwu Writing from Enugu State.