China will take over Nigerian assets if FG defaults on loan… Amaechi
Minister of Transportation, Rotimi Amaechi, has said China will take over Nigerian assets built with the $500m loan the country gave to Nigeria if the Federal Government defaults in repaying the facility.
A sovereign immunity clause in the loan has generated public outcry and is currently being probed by the National Assembly.
China took over some assets in Zambia after the Zambian government defaulted in loans similar to the one collected by Nigeria.
Speaking during a live television programme on Friday night, Amaechi said, “The only thing they (China) will take over if payment is not made are those things constructed with the money.”
Noting that the Federal Government has commenced repayment of the loan, he said $96m has been paid out of the $500m that was borrowed for the Abuja-Kaduna rail corridor.
The minister noted that the sovereign immunity clause was a normal aspect of loan agreements.
He said, “They (sovereign immunity clause) are there in every loan signed and the borrowers want to know that the country they are giving money will be able to pay back.
“It is a commercial agreement between Nigeria and China. Let us not look at the legal issues right now.
”The first issue is that the Ministry of Transportation does not take loans. Anything about loans has to be done by the Ministry of Finance, so I could not have signed a loan because it is not my jurisdiction.
“What I signed is what they call commercial contract between the federal government and CCECC as the contractor, and the contract between Nigeria and China is usually signed by the ministry of finance on behalf of Nigeria.
“Whether it is the Ministry of Finance that signed it or the Ministry of Transportation, the issue is that there is nothing of such that will not warrant an agreement, and that agreement must contain some terms, and one of those terms in this agreement is not that we are signing away the sovereignty of the country.
“What we do is to give a sovereign guarantee.
“What it means is that if tomorrow I am not able to pay back the loan and you come to collect the item we agreed upon, I cannot waive my immunity and say that you cannot touch the assets, because we are a sovereign country.
“The terms say if we are not able to pay, we should not stop them from taking back those items that will make them recover their fund.
“The clause is a standard one whether it is America or Britain we sign an agreement with, because the countries want to know if they can recover their money.
“What the clause does is to say to you that I expect you to pay the money according to the terms agreed, and if you don’t pay, don’t waive your immunity on me when I come to collect back the guarantee that you put forward.
“The Chinese are asking us to show them evidence that we will pay back, and we have said we will waive our immunity clause so that if we don’t pay back, they will take back their assets.”
Amaechi added that the National Assembly was aware of the loan agreement.
He warned that the probe launched by the National Assembly could make it difficult for Nigeria to obtain loans in future.
According to him, Nigeria was in urgent need of loans for infrastructural development.
Amaechi said, “There is no loan in Nigeria that will not be approved by the National Assembly.
“The Chinese government will not even give you a loan without approval from the National Assembly.
“If the outcry is too much, then we will stop collecting loans, and when we stop, there will be no development.
“Before we came, there was money, but now we don’t have money. It is just that we are on oath not to reveal the government’s confidential matter. If not, I can say as the former chairman of the governors’ forum, what was in the purse.
“We took $1.6bn to fix Lagos-Ibadan. We are asking for $5.3bn to fix Ibadan-Kano, $3.2bn to fix Port Harcourt to Maiduguri, $11.1bn for Lagos to Calabar. If those things were done when we had money, will we be here today?
“I thought that both the National Assembly and the country should at least acknowledge the fact that we are making progress in terms of infrastructural development.
“I told them at the National Assembly that the probe may stop them from giving us the loan and we have the capacity to pay back. The good thing about the loan also is that they are paid directly to the contractor and not to us,” he said.
Continuing, he said, ”So far, the Ministry of Transportation got a loan of $500m for Abuja-Kaduna. For Lagos to Ibadan, I think it is $1.3bn that we took. The rest is counterpart funding from us. I think that is what we have collected.
“We are expecting others but the probe may stop that. And if it stops it, we won’t be able to construct other projects as proposed. What should be overriding now is national interest.
“And we need to construct Ibadan to Kano so that we can be able to evacuate cargoes from the ports. But what they are doing may stop that, and I am currently getting that signal from them.
“So if we go now and the Chinese say that they won’t give us money because the arm of government that is supposed to approve this loan and which has already approved the loan is beginning to question the loan, we are not sure that we can recover the loan. Then we are in trouble.”
Faulting the position of the National Assembly on the matter, he added, ”I challenge the committee to publish the terms.
“The immunity clause and the sovereign guarantee in trade parlance simply mean that they are not giving us the loan free of charge.
“The National Assembly has the terms, and that is why I am wondering why they are investigating it, because it is unconstitutional to take a loan not approved by the National Assembly.”