Business News
Chinese Loans: ‘Sovereignty Clause’, Contract Term to Ensure Payback -Amaechi
By Mathew Dadiya, Abuja
Following reactions by Nigerians on the allegations that the country may forfeit her sovereignty to China over the railways projects loans, the Minister of Transportation, Mr Rotimi Amaechi has explained that the clause ‘waiving sovereignty’ in the loan agreement between Nigeria and China “is only a contract term.
”The Minister made the clarification at the weekend while responding to questions about the loan controversy on a TV programme.
Amaechi said that the “the sovereign guarantee assures payback according to the terms and conditions of any loan.”
He added that the Ministry of Transportation was not responsible for taking loans, but to implement the projects or contracts for which the loans were taken.
“It is a commercial agreement, it’s a trade agreement between Nigeria and China. The first issue is that Ministry of Transport does not take loan. Anything about loan, talk to Ministry of Finance. What I signed is what they call commercial contract, that is contract between the federal government and CCECC as a contractor.
“The contract between Nigeria and China is usually signed by the ministry of finance on behalf of Nigeria, but that will be escaping the issue. Whether it is the Ministry of finance that signed it or the Ministry of Transport, the issues are the issues.
“There is no contract without an agreement and that agreement must contain some terms and one of the terms that this one contains, is not that you’re signing away the sovereignty of the country.
“No country will sign away its sovereignty. What you do is, you give a sovereign guarantee; and I’m ashamed of those who interpret it the wrong way.
“Now, when you say ‘I give you a sovereign guarantee and I waive that immunity clause, the immunity clause is that, if tomorrow I’m not able to pay you and you come to collect the items that we’ve agreed upon, that these are items I have put down as guarantee, I can use my immunity and say no, you cannot touch our assets, we are a sovereign country. Is China our father that will give us money for free? They (the Chinese) are saying, if you are not able to pay, don’t stop us from taking back those items that will help us recover our funds.
“And it’s a standard clause, whether it’s with America you signed it or with Britain or any country, because they want to know they can recover their money.
“What the clause does is to say to you, I expect you to pay according to those terms and conditions. If you don’t pay, don’t throw your immunity on me (the lender) when I come to collect back the guarantee you put forward, that’s all.
“The waiving of immunity simply means in trade parlance that I’m not giving you this loan free. Just like if you go to take a loan from the bank, the moment you don’t pay, they go after the assets you put down. And people are politicising it. The Chinese can never come and take over Aso rock and become President or Minister.
Allaying the fear of some Nigerians asking if it’s possible to repay the loan and not get into the same situation as Zambia, Amaechi stated that the loan was already being repaid “In the same National Assembly committee sitting, they were told that out of the 500 million dollars, we’ve paid 96 million dollars already.
“Nigeria is already paying… So, it’s not that Nigeria doesn’t have the capacity to pay back. We’ll pay back. At 2.8 percent, what other country would give you that loan? 2.8 per cent for 20 years with 7 years moratorium, why can’t you pay back? The repayment plan is not done by us, it’s done by the ministry of finance, but they are meeting the requirements. At any point in time that we need to pay, we pay,” the minister explained.
He maintained that the loans were not paid to him nor the Ministry, which automatically eliminates any fear of corruption or diversion of funds – “They are paid directly to the contractor in China.”
He said: “I told them at that meeting, that these loans are not given to us, they are paid directly to the contractor. Once we sign that the job has been done, they pay the contractor. And this has never been done before. So what is critical is that the projects are being done. Or, are they trying to rubbish the fact that there is a railway from Abuja-Kaduna?
“These loans are not paid here, so you can’t even steal it. What we do is ensure that the work is done. We hired an Italian company that goes with our engineers in the ministry to ensure that the Chinese meet the European standard, so that there are no fake things or poorly done work. When they check and say yes, this has been done and done to the standard of the contract approved, then they pass it on to us, we sign and approve that the work has been done. It is then sent to the ministry of finance who also appends their signature and passes it on to the Chinese Exim bank who then pays to the contractor. “
“The job is development related. If you don’t do it, you don’t get paid. So the contractor would want to do the job, he wants to satisfy his client, so that the client can sign to say that he has done the job.”
The Transport’s Ministers reiterated his call to the National Assembly to put a hold on the probe as some loans were still being expected for the completion of Lagos to Ibadan and the construction of Ibadan to Kano and Port Harcourt to Maiduguri rail.”
“There is an agreement for Abuja to Kaduna which was signed before we came, we signed the Lagos to Ibadan, we want to sign the Ibadan to Kano. Now we’ve also applied for them to give us a loan for Port Harcourt to Maiduguri which entails that when the loan is approved, we’ll construct the rail from Port Harcourt to Aba to Owerri to Umuahia to Enugu to Makurdi to Lafia to Jos to Bauchi to Gombe and then to Damaturu. Everybody is shouting that there is no railway in the South East. But there is railway in the South South.,” he said, noting that the Itakpe to Warri which was abandoned for 34 years was completed without taking a loan. He stressed that both the National Assembly and the country should at least appreciate that the government was making progress in terms of infrastructure development.
“So what should be primary to them is national interest, because we need to construct Lagos to Ibadan to be able to evacuate cargoes that come from Lagos to the hinterlands. So what they are doing now, may likely stop that. The same way, the government is under pressure to construct Port Harcourt to Maiduguri which passes through the south Eastern States and the North Eastern states.
“If we go now and the Chinese say ‘we won’t give you the money because the arm of government that is supposed to approve this loan, which they have already approved are beginning to question the loan they have approved, we are not sure that we can recover the loan,’ then we can’t finish our projects,” Amaechi said.
He argued that all loan applications pass through the National Assembly for approval and wondered why they were investigating what they approved.
The minister said he would had loved to publish those clauses if not for the issue of confidentiality in government, stating that the National Assembly knows about the clauses because “it is unconstitutional to take a loan that is not approved by the national assembly.”
He explained further that the lawmakers were aware of all those loans, asking why they were investigating same.
He said, “The Chinese is just asking us to show them the evidence that we will pay back which is the immunity clause, if we don’t pay, they can take back their assets and don’t forget that we can’t take loan without the National Assembly approval.
“There is no loan in Nigeria either internal or external that is not approved by the National Assembly , none. Chinese government will not even give you a loan without approval by the National Assembly because if they give you a loan without the approval from NASS, that is no loan.”
The Greater Port Harcourt City 2024 Management Retreat, with the theme, “Transiting to New Smart Cities; The Beginning” which held from April 26 – 27, 2024 at the Swiss International Hotel, Mabisel, Port Harcourt brought together a diverse group of government officials, stakeholders, industry experts, and leaders of thought to deliberate on key issues related to the sustainable development and growth of Greater Port Harcourt City.
The retreat was flagged-off by the Governor of Rivers State, Sir Siminilayi Fubara, ably represented by the Deputy Governor, Prof (Mrs) Ngozi Nma Odu who assured the Greater Port Harcourt City Development Authority (GPHCDA) management that the Governor has a keen interest in seeing that the vision of creating the Greater Port Harcourt City is fully realized during his tenure.
He emphasized his commitment to support the authority towards the achievement of the vision for the good of the people of Rivers State and truly make Greater Port Harcourt City a model for other states to emulate, calling on the management to seize the moment and lay the ground work for a city that is prosperous, liveable and futuristic.
In his address, the acting Sole Administrator TPL (Dr) Tonte Davies highlighted the road map and action plan, which the GPHCDA is undertaking towards achieving the vision of creating new smart cities and in the context of the outlined drive, the recent ground-breaking for the ongoing 20,000 low income housing units is a recognised cardinal move that points to the start of a major implementation activity which will enhance this focus.
He also listed achievements like the completed phase 1 storm water canal retention, the 500,000liters capacity water project, the installed 11kva switch-gear panel, and 3kva electricity power substation amongst other ongoing infrastructural projects. Dr Davies happily informed the meeting of the introduction of a digital solution to streamline physical planning regulations and documentation to facilitate business transactions and enhance express approvals, which promotes the ease of doing business in that regard.
The Executive Secretary, Nigerian Content Development Management Board, Engr. Omatsola Felix Ogbe, represented by Mr Olubisi Okunola, Manager Strategy, presented a paper on “Transformation and Reorganisation of a 21st Century Organisation; The NCDMB Experience.” He took the participants through the transformative journey of the board, which placed them as one of the most productive public sector organisations in the country. He stated that the board has transformed the oil and gas sector with strategic partnerships, which has enhanced local participation in the industry to about 70% in the past few years.
Also an international investor from Gambia and CEO of RIV/TAF, Mustapha Njie, presented a paper on affordable housing Initiative and promised the timely completion of the ongoing TAF City 20,000 housing units project, a pet project of Gov Sim Fubara. He gave participants strategic insight on the keys to successful project implementation and project delivery and stated that the RIV-TAF project has recorded remarkable progress with *about* 400 housing units *at various stages of completion within three months of its flagoff.*
The lead paper presenter, renowned Town Planner Kazeem Sanusi tasked the management of the Greater Port Harcourt City Development Authority to stand out in their responsibilities emphasizing that the most beautiful aspect of planning is inclusiveness, utilizing the power of crucial discussions and team work. He stated that the GPHCDA stands on the threshold of history to transform the new city into a model smart city just like Dubai was transformed in the past few decades.
He urged the participants to be committed to fostering partnerships and *collaborations* to drive sustainable development in Greater Port Harcourt City, including engaging with private sector stakeholders, civil society organizations, and international partners to implement the sustainable development practices and initiatives in the new city.
In his closing remarks the Administrator, Greater Port Harcourt City, TPL (Dr) Tonte Davies promised a commitment to the comprehensive action plan outlining key priorities, initiatives and timelines for implementing the ideas and recommendations generated during the retreat. He further declared that the just concluded Greater Port Harcourt City Management retreat has set the stage for a new chapter in the city’s development journey, noting that the vision, passion and commitment of Governor Sim Fubara and the enthusiasm and shared vision of all participants has laid a strong foundation for the sustainable growth and prosperity of Greater Port Harcourt City and the state at large.
The Lead Consultant Mr Ono K. Akpe of Red Sapphire Ltd , Abuja, who led a team of seasoned facilitators engaged the participants for the two days at the retreat with cutting edge intellectual discourse to broaden knowledge in various aspects of management covering work ethics, organizational culture, entrepreneurship, team building, infrastructural development, innovation and mind-set change, re-branding and marketing smart cities.
By Tony Obiechina, Abuja
The African Export-Import Bank (Afreximbank) has announced the successful completion of a first-of-its-kind India-focussed club deal for US$282.00 million.
Initiated for the exclusive participation of Indian lenders, and arranged by Bank of Africa UK PLC, the primary syndicated club deal saw participation from Indian lenders through their overseas branches and subsidiaries in the Dubai International Financial Centre in the United Arab Emirates, Singapore and Mauritius.
The facility, which was backed by six participating banks and financial institutions, including five that joined as first-time lenders to Afreximbank, helping the Bank achieve its objective of diversifying its funding sources, carries a three-year tenor.
At a commemorative event held in Dubai, U.A.E., to mark the conclusion of the deal, Haytham ElMaayergi, Executive Vice President at Afreximbank, said that the conclusion of the initiative represented a major milestone for the Bank as it sought to fulfil the key objectives of its funding programme.
Highlighting the importance of investing in, and for, Africa, Mr. ElMaayergi said: “this facility will help Afreximbank to continue to play a major role in the development of intra-African trade and trade between Africa and the rest of the world, particularly with India.
It is a testament to the rapid growth in Africa’s economic relationship with India and is evidence of Afreximbank’s growing ability to harness resources into Africa and to fund trade finance related investments that would have a positive impact on trade between Africa and India.”
Chandi Mwenebungu, Director and Group Treasurer of Afreximbank, reviewing the Bank’s vision for Africa, said that its funding objectives included achieving the diversification of its liability book by geography, investor type and tenor.
Also addressing guests at the event were Said Adren, CEO of Bank of Africa UK PLC, who thanked the lenders for their participation, and Zineb Tamtaoui, General Manager of Bank of Africa, Dubai Branch, who expressed appreciation for the opportunity to put together “a landmark deal that would be a stepping stone to many India-focused club deals going forward.”
By Tony Obiechina, Abuja
Geregu Power Plc has generated N50.4bn on electricity sales and capacity charges to Nigerians in the first quarter of 2024.
The power company which is the first listed power company of the Nigerian Exchange Ltd disclosed the performance in its Q1, 2024 financial statement.
The company grew its Q1 revenue by 225 per cent from N14.
2bn in 2023 to N50. 4bn in 2023.A breakdown reveals that Geregu Power sold energy worth N31bn and received N19bn as revenue from capacity charge.
Recall that the power company posted an annual revenue of N82.9bn in the full year of 2023 but it has covered half of the amount in Q1.
The revenue was above the company’s forecast for Q1 2024 when it projected its revenue to rise to N31.24bn.
Geregu Power recorded a profit before tax of N21.9bn up from the N5.3bn recorded in Q1 of last year, reflecting 307.8 per cent growth.
During the period underreview, the company saw its profit after tax rose by 307.3 per cent to N14.46bn from N3.54bn recorded in Q1 of last year. In the full year 2023, the company made N16.1bn net profit.
The net profit was above the company projection of N5.5bn.
Geregu Power took an income tax charge of N7.43bn, up from the N1.8bn in Q1 2023. The tax charges were higher than the N2.7bn projected for Q1 2024.
The company also spent N21.5bn on the cost of sales involving gas supply and transportation, up from the N6.6bn spent on gas supply and transportation in Q1 2023.
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