Nigeria: $9.6bn Judgment Debt - Review All Contracts With IOCs, Ex-CBN Chief Tells Govt

25 September 2019

Abuja — A former deputy governor of the Central Bank of Nigeria (CBN), Dr. Obadiah Mailafia, has declared that the $9.6 billion judgment debt against Nigeria in the case with an Irish registered firm, Process and Industrial Developments (P&ID) Limited has offered the country a golden opportunity to revisit all the contracts entered into with international oil companies (IOCs).

In an interview with THISDAY, Mailafia, who was the presidential candidate of the African Democratic Congress (ADC) in the 2019 polls, lamented the P&ID controversy, but noted that in every storm, there is always a silver lining.

He, therefore, advised the federal government to latch on the situation and review all contracts with foreign oil companies.

"It provides a golden opportunity to revisit our oil sector and to revise all the contracts we have entered into with foreign oil companies. Every storm has a silver lining," Mailafia said, regretting the regulatory uncertainty in the oil sector, which remains by far the biggest source of domestic and foreign earnings.

" Last year, the National Assembly passed only one aspect of the Petroleum Industry Bill (PIB). Such half-way solutions can be more dangerous than no solutions at all. I suspect that the iniquitous multinational oil companies did their best to kill the bill and to put enough spanners on the spokes of economic reform of the petroleum sector.

"It is a very murky business. For my part, I do not see why individuals should own oil blocks. Why can't they be sold to states and local communities? Why can't we enforce a metering system to ensure greater transparency in the daily lifting of crude by the oil majors? Why can't NNPC be transformed into a fully commercial venture like Saudi Aramco, Petrobras of Brazil and Petronas of Malaysia?

"Why must it continue to be treated like a cash cow to be milked to the hilt by successive administrations to the detriment of the Nigerian people? For my part, I see a rainbow in the recent $9.6 billion award by the London Admiralty and Commercial Court against our country in favour of a shadowy 419 offshore firm by the improbable name of Process and Industrial Development (P&ID). It may well turn out to be the biggest legal scam against the government and people of Nigeria."

On the economy, he said the present administration does not believe in economic development, but is preoccupied with what he described as a different agenda.

His words: "From all intents and purposes, the regime in power does not believe in economic development and social progress as such. Their mindset is rather backward and highly revanchist. They have a different priority and agenda. And this is probably why there is not a single economist in the entire administration. The so-called economic management team exists but in name. They have succeeded in destroying the moral consensus that existed among the elite. The country has become more divided than ever.

"As a matter of fact, our ship of state is heading towards a massive rock. Only fools blinded by power and hubris cannot see it. In that kind of atmosphere, nobody would want to invest. People with capital are shifting it rapidly into dollars for safety," he added.

"There is also evidence of massive capital flight. The net effect is, of course, slow growth and the spiral of secular economic decline. The gloom and despair I see in the faces of the youths is heart-breaking and unprecedented."

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