President Muhammadu Buhari's second term tenure as President is taking off on what seems a small crisis but capable really of reversing all if any economic gains he may have recorded in the last four years. It has to do with the ruling in the United Kingdom, of a commercial court that now offers the UK firm, Process and Industrial Development Limited (P & ID) the sum of $9.6 billion, which Nigeria must pay, or in lieu, lose national assets of that value, in the UK to the company. Nigeria is indeed in a serious predicament over the issue given our debt profile of over $24.3bn(Dec,2018) and a foreign reserve of only about twice that profile at $45bn.
Dusting off his old desk to begin his second stint as Attorney General and Minister for Justice, Abubakar Malami vowed that the federal government would punish any government official whose action or inaction led to the award of the $9.6billion contract violation judgement against Nigeria by a British court. As I am writing this column, the UK firm Process and Industrial Development Limited has instructed its lawyers to identify Nigerian assets in the United Kingdom for seizures in the event of non settlement of the judgement debt.
"As a government that has the mandate of the people, and their interests at heart, we shall not fold our arms and allow this injustice to go unpunished as all efforts, actions and steps shall be taken to bring to book all private individuals, corporate entities and government officials - home or abroad and past or present - that played direct and indirect roles in the conception, negotiation, signing, formation as well as prosecution of the purported agreement," Malami vowed.
Nigeria "will vigorously defend its rights to protect its people's assets around the world against the enforcement of the judgement," charging that it was the "consequences of the underhand dealings of the past regime" of President Goodluck Jonathan. The government has described the damages as an over-compensation that is "clearly unreasonable and manifestly excessive and exorbitant", "far beyond any legitimate protection of the commercial interests of P&ID"; and "completely wrong and obviously unjustifiable".
A Gas Supply and Processing Agreement (GSPA) was signed between Nigeria represented by the Ministry of Petroleum with P&ID in January 2010. In the agreement, Nigeria would "supply natural gas (wet gas) at no cost to P&ID via a government pipeline to the site of P&ID's production facility." P&ID would construct and operate the facility, process the wet gas and return to the government of Nigeria, clean gas to be used for power generation at no cost to the government of Nigeria. For 20 years, P&ID would uptake all other derivatives stripped from the wet gas.
In 2012, disputes broke out leading P&ID to take the Nigerian Government to an arbitration court in the UK. According to P&ID, while it built its facility, the Nigerian government had failed to make wet gas available as agreed. It seems a fait accompli given that Nigeria has lost in a commercial court of arbitration and may inadvertently pay the judgement debt or suffer the seizure of any UK based national assets. This development is a disgrace, revealing lack of patriotism of all those Nigerians who led and managed the project. It speaks volumes of our incompetence. As usual, Government has been quick to blame the Goodluck Jonathan administration, arguing that the project failed between 2010 and 2012. The Goodluck Jonathan team has hit back arguing that between 2015 and the day of this judgement a fortnight ago, the Buhari administration has had ample time and opportunity to have reconfigured the project towards saving it and at best, securing an amicable settlement of the agreement with P&ID. The worry now is that Nigeria may be forced to settle the judgement debt in order to forestall the execution, but then, again a settlement may spark off a flurry of similar failed agreements. In Nigeria, it does not rain. It pours.
Nigeria has a whole lot at stake. The FBI crackdown which saw to the arrest of nearly 80 Nigerian fraudsters, and the planned execution of well over 20 drug couriers, all Nigerian in Saudi Arabia has severely dented the country's already battered image. It is disgraceful that every Nigerian is seen as a scammer until he proves himself straight and clean. As hard as the Buhari Government would try to mitigate this detestable judgement, it is more than likely that every effort would hit a brick wall. More significantly, settling a debt of $9.6bn against our debt profile of over $24.3 billion, and a foreign reserve of only $45bn in an economy hovering just a nose above the mire of a recession is bound to imperil the individual standards of living of Nigerians.
In a dispute, one's sentiments remain blindly in favour of one's own country in patriotic empathy with the national predicament, but the facts as they seem, stand against Nigeria. The action of a few individuals precipitated the dispute, as if it was not bad enough that the country was made to enter an amorphous agreement that did not protect the national interest, by all accounts. Then bureaucracy caused a reneging on agreed terms. The change of Government occurred in 2015 and we can see that for the 10 months that President Buhari neither occupied office, nor appoint a cabinet, the project stalled past the agreed time scale. Clearly, Nigeria is on the back foot. But Justice Minister Malami reads the issue correctly. Nigeria must pursue every angle to get a relief, or at best, pay a more realistic penalty for the default. The sooner the better to get the matter behind us. Of course all persons whose errors of omission or commission brought this upon the country must be made to account for their deeds.