Chinese Loan: Reps fault sovereignty clause, calls it ‘dangerous’

The House of Representatives has faulted the sovereignty clause in Nigeria’s loan agreement with China, saying it was dangerous.

The Chairman of the  House Committee on Treaties, Protocols and Agreements, Nicholas Ossai, said this in Abuja at the investigative hearing  on  external loans and commercial agreements.

Ossai said Nigeria’s loan agreement with the China was being governed by Chinese law and that despite the fact that the Federal Government in  2014 signed  an Executive Order providing guidelines on  waiver of sovereign immunity during loan and commercial agreement negotiations, Nigerian officials had been violating the order.

“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 said, “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 Ossai, the Reps probe was not limited to Chinese  loans and commercial contracts. Ossai stated, “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 Punch reports that members of the executive,  who appeared before the 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.