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Amaechi Explains Sovereignty Clause in $500m Chinese Loan

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Minister of Transportation, Rt. Hon. Chibuike Rotimi Amaechi, has explained that the clause ‘waiving sovereignty’ in the loan agreement between Nigeria and China was only a contract term, a sovereign guarantee that assures payback according to the terms and conditions of any loan.

Amaechi made the clarification while answering questions about the loan controversy on a TV programme, yesterday.

He also explained that the Ministry of Transportation was not responsible for taking loans, but to implement the project or contract for which the loans were taken.

He said, “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. 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 waive my immunity and say no, you cannot touch our assets, we are a sovereign country. 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 waive your immunity on me (the lender) when I come to collect back what is the guarantee you put forward.

The waiving of immunity simply means in trade parlance that I’m not giving you this loan free of charge. 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.

Allaying the fear of some Nigerians asking if it’s possible to repay the loan, Amaechi stated that the loan was already being repaid.

“But we’re paying, he said. “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 per cent, what other country would give you that loan? 2.8 per cent for 20 years with seven 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.”
The minister further explained 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.
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.
“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 the Chinese Exim bank who then pays to the contractor. So how do you see the money

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. So what is the problem. Is this political?

Amaechi also 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.

“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 to Maiduguri which passes through the south Eastern States and the North Eastern states.

“So 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.ß

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JUST IN: IPMAN Threatens Strike Action As Fuel Scarcity Looms

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The Independent Petroleum Marketers Association of Nigeria (IPMAN) Suleja/Abuja Unit, on Sunday, threatened to embark on a strike action over alleged extortion by officials of the Department of Petroleum Resources (DPR).

It said members would be instructed not to load from Suleja depot in Niger State.

The Chairman of the Unit, Alhaji Yahaya Ahman Alhassan, made the disclosure during an interactive session with journalists in Abuja.

According to him, the association seeks an explanation as to DPR’s incessant demand for daily sales activities from filling stations.

“IPMAN has no other alternative other than instructing our members not to load from Suleja depot in Niger State to express our frustrations after all efforts to make DPR officials desist from unethical practices failed.

“These issues have to be resolved before we can commence lifting of products from the depot,” he said.

The strike action is expected to commence on Monday, June 21, 2021.

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Data shows Nigerians are more miserable under President Buhari

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Every May 29, Nigeria remembers the beginning of the end of decades of military rule and the start of democracy.

Nigeria, Africa’s largest economy is now in its 22nd year of uninterrupted democracy, the longest since the country was created in 1960.

To many, democracy was long sought as the best model of governance that can lead Nigeria into political stability, respect for the rule of law and economic prosperity. While there has been political stability and just above average respect for the rule of law, economic prosperity appears to have eluded the country in the last 22 years.

Several macro-economic indicators provide a solid reference to gauging how the economy has performed throughout the last 22 years that have seen the country vote for 4 democratically elected presidents. GDP Growth rate, inflation rate, lending rates, population growth rate, unemployment rate, etc., are examples of macroeconomic indicators used by economist to ascertain how countries have performed. More importantly, is how these indicators have impacted the standard of living of Nigerians.

However, a more reliable metric is the misery indexwhich combines all of the macroeconomic indicators mentioned above. It accounts for insufficient jobs, expensive access to funds as a result of high lending rate, increase in the price of goods and services, and the reduction in consumption due to low growth rate. These are the main features that make up the core concepts that are measurable with regards to the misery index.

Furthermore, the 22-year democratic average GDP growth rate is 5.1%, in the last five years (2015-2020), the average economic growth rate was 0.68%, which is much below the average population growth rate of around 2.5% per year since 1999. There is increasing Misery as a result of this growing tendency for the population. In the fourth quarter of 2020, the unemployment rate grew to 33.3%, up from 3.79% in 1999.

According to the data, the misery index of Nigerians has been on a steady increase. Consequently, it would be judicious to examine each administration’s contribution to the misery level of Nigerians despite their campaign promises.

Misery contribution by political administration since the fourth republic

Using data gathered from Nairalytics, the research arm of Nairametrics, Nigeria’s misery index was the least (comparative to other presidents after him) during the 8 years presidency of Olusegun Obasanjo between 1999 and 2007, and the misery level has worsened under President Muhamadu Buhari from 2016 to date.

The price of crude oil, Nigeria’s largest source of revenue, was high (averaging $91 per barrel) during the Jonathan administration but dropped significantly in Buhari’s tenure falling as low as $30 per barrel shortly after Mr Buhari took office. This has contributed in no small way to the lack-lustre performance of the economy under his leadership.

Olusegun Obasanjo, 1999 – 2007

According to data from Nairalytics, under Olusegun Obasanjo, Nigeria’s first democratically elected president since the return to democracy, economic misery stood at 29.8 index points in his first year of presidency. The major propeller of the misery index was high lending rate of 20%, low growth of 0.58% and inflation of 6.6%. In his final year as president (2007), the misery index had fallen to 18.39, GDP growth was 6.59% and inflation and lending rate were down to 5.38% and 16% respectively. Obasanjo’s presidency averaged a GDP growth rate of 6.95% during his 8 years in office, he also kept unemployment low at 3.6% from 3.8% in 1999.

During Obasanjo’s presidency, Nigeria experienced a relatively secure economy, with private sector reforms in telecoms, banking, and pension administration. His government also laid a formidable foundation for other market reforms carried out by subsequent Nigerian presidents.

Umaru Musa Yar’Adua, 2008-2010

The late Umaru Musa Yar’Adua started office with a misery index score of 23.38 index point in 2008. Economic growth in 2008 was 6.76%. In 2010, it hit a peak of 9.13%, averaging 7.98% for Yar’Adua’s short time in office.

Although his presidency was characterized by rapid growth, he was unable to reduce the misery level of Nigeria. His administration was plagued with double digit inflation and an increase in lending rate which increased the misery score to 26.92.

During Yar’Adua’s administration, the country saw a significant commodities boom, a financial market meltdown in 2008 that largely spared Nigeria, and a reversal of the sale of NNPC refineries owing to a lack of sincerity in the process.

Goodluck Ebele Jonathan, 2011-2015

Following the death of his predecessor in 2010, Goodluck Ebele Jonathan took over as President and was re-elected in 2011. With a GDP growth rate of 5.30% and inflation of 10%, the misery index score at the start of his term was 25.26 points. The highest growth rate was 6.22% recorded in 2014. Nigeria’s average GDP growth rate was 4.80% under his leadership, from 2011 to 2015.

However, a fall in growth rate and the relatively high lending rate led to the misery score increase at the end of his tenor to 27.55 index point.

During his presidency, he oversaw the implementation of reforms such as fuel deregulation, which was hampered by the “#OccupyNigeria” protests, as well as the successful completion of the first phase of Nigeria’s reforms, which saw the deregulation of PHCN assets into today’s GenCos and DisCos (transmission is still in the hands of the Transmission Company of Nigeria, which distributes the power to DisCos nationally).

Muhammadu Buhari, 2016-2020

On the promise of “CHANGE,” Buhari’s administration secured his leadership by defeating the incumbent opposition party, a first-time occurrence in Nigeria’s democratic history. The misery score stood at 41.12 index points at the start of Buhari’s term.

Under the Buhari administration, the economy has experienced rising food inflation and currency inflation which have seen Nigeria’s GDP per capita fall to the level it was 40 years ago. These stood as the major propeller of misery.

The administration has fallen short of its promises for a variety of reasons, even though it has performed admirably in social welfare schemes implemented under the National Social Investment Program (NSIP). The National Home-Grown School Feeding Program (NHGSFP), the N-Power program, which aims to create jobs for 1 million beneficiaries, the GEEP program, which will provide loans to an additional 1 million traders, farmers, and market people, and the Social Register, which will accommodate an additional 1 million households, are among these programs. TRADERMONI, MARKETMONI, FARMERMONI, MSME Survival Fund, and N75 billion National Youth Investment Fund are among the others.

Currently, his presidency is characterized by a high unemployment rate of 33.3% (Q4 2020) which neutralizes the 0.51% GDP growth rate (Q1 2021), a high inflation rate of 18.17% (March 2021) and prime lending rate of 11.24% in April. These placed the misery score at 62.2 index point.

What this means

The figures show that Nigeria has experienced an increasing misery level since the fourth republic and the nation is facing its worst hardship under the current administration. However, while some might be quick to point to democracy as the problem, it is important to note that the happiest countries in the world still practice democracy.

In conclusion, the persistent insecurity issues, nationwide protest of #Endsars and most recently, the #twitterban are not doing any favour to the current administration in elevation of misery in the country. Hence, a more inclusive approach should be taken by the government to reverse the current downturn.

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Soldiers stop 73 Nasarawa youths going to Imo

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Troops of 72 Special Force Brigade, Nigeria Army, Makurdi, have intercepted 73 young men headed to Imo from Nasarawa.

They were being transported inside five trucks with 47 motorcycles when soldiers stopped them at Agan Toll Gate within the Benue capital.

The vehicles also contained sacks of minerals loaded from Plateau State for delivery at a Port Harcourt-based company.

Benue Deputy Governor, Benson Abounu visited the Army barracks on Tuesday. He commended the military personnel for their vigilance and conduct.

Abounu said contrary to speculations and fear of attack, “no arms were found after a thorough search conducted by the soldiers.”

He advised the Army to thoroughly profile the young men to ascertain the actual mission of their trip and possibly fish out those who provide questionable responses.

Lt. Col. AD Alhassan, Commander of 72 Special Forces Brigade disclosed that his men acted on intelligence.

Alhassan confirmed that no weapons were found after the search conducted on the passengers, trucks and motorcycles.

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