“As Finance Minister in 1993-1998, I did not enter into any loan agreement since Nigeria did not borrow internally or externally during my tenure. However, I had the opportunity of verifying, analyzing and reassessing the Nation’s debt profile and this involved reading the debt agreements, these were very pathetic and heart rendering.”

“The Nigerian negotiators surrendered their sovereignty to lenders, they put their Embassies abroad as securities and even used our foreign reserves as securities. When a lender or contractor comes to negotiate with Nigeria, he employs the best Lawyers, the topmost Accountant, very good Economist but Nigerian Negotiators go with nothing and in many cases, we sign the agreement without thinking after receiving token bribes and staying in luxurious hotels packed with women.”

“A typical example that happened during my time was the Nigerian LNG Project. Towards the end of 1994, the World Bank on the instigation of the United States of America withdrew their participation from the project in hope that the project will collapse and be discontinued. Our budgeted revenue from oil after deducting joint venture contribution and debt servicing charge was not up to $5bn between 1995 and 1997 yet I had to look for funds to fill the gaps created by the withdrawal of the World Bank and by 1996, I had successfully filled this gap through monthly standing orders paid directly to Shell Oil Company Ltd, the project coordinator.”

“In 1996/97, when the contract for the LNG project was to be negotiated, Ministry of Finance was not invited or involved. I had chosen a team made up of the Accountant General of the Federation, the chairman of the Federal Inland Revenue, the Director of External Finance, the Director of Special Duties and the Legal Adviser to represent the Ministry with specific remit to look into the tax structure of the project and the financing of the whole project particularly the shipping line. Shell invited NNPC to an island in West Indies where a bogus agreement was entered into and that is why everything with LNG today is opaque. The Ministry of Finance was never involved with the negotiation of the LNG project. I brought this matter to the attention of the Head of State, General Sani Abacha, and I had to issue a circular that the Federal government will not pay for any foreign currency denominated contract negotiated without the involvement of the Ministry of Finance.”

“Invariably, when these bogus contracts are subsequently reviewed one can see the damage done to Nigeria and there is the urge to change the contract but it is too late. The next stage is to frustrate the contract and the result is arbitration and even because of our carelessness, the arbitration is never in Nigeria’s favour. The present award of $9.6bn to P&ID (the Irish Contractor) is not strictly a legal matter but a very serious financial consequences yet Nigeria has not appointed any top firm of financial and actuarial consultants to look into the award in all its ramifications and advise the government. I have not read the agreement with P&ID or the arbitral award of $6.3bn being the estimated profit the company would make in the lifespan of the contract estimated to last for 20 years. In addition, there is a cumulative interest of $3.3bn. The award was made in 2014 when the project had not even started. No one knows whether the project would have been completed in September 2019. The award was made by an arbitration, the membership of which was agreed by the Nigerian government although the Nigerian representative awarded only $250m. The British High Court has confirmed the award of $9.6bn and Nigeria is appealing to the British court of appeal. We have been fed with stories that the contract was fraudulently obtained but I do not know whether this can be argued in the Court of Appeal if it was not pleaded in the Court below. I suppose what we are appealing against is the excessiveness of the $9.6bn being the expected total profits of 20 years to come. Apart from other financial information that may be gleaned from the contract agreement and the arbitration award, any seasoned Chartered Accountant or Financial or Actuarial Consultant will first of all look for present day value of $9.6bn re-envisaged in 20 years at the rate of interest used by the Court to calculate the interest of $3.3bn. It will be found that discounted amount will be minimal and this is the figure on which interest would be charged and we should use this to appeal at that Court of Appeal. Anything short of this will be waste of Court of Appeal time.”

“I advise the Government as a matter of urgency to employ the Consultants I have suggested above to carry out the assignment. In addition, the government should set up a contract vetting division in the Ministry of Justice where all government contracts particularly those involving foreign currency must be vetted before signature. This must apply to all MDAs. Additionally, Government must ensure that the Ministry of Finance must be involved in all contracts involving foreign exchange. I can bet that the Ministry of Finance was not involved in the P&ID contract arrangement.”

COLUMNIST’S POSTSCRIPT OCTOBER 2019: In retrospect, between 1994-98, Nigeria climbed out of minus 10 per cent negative growth, and recorded steady positive growth throughout that period, with a stable exchange rate of N82=$1.

Furthermore, the economy was managed, with astute financial discipline, without addition to National Debt, which remained $27bn till 1999. However, some readers may recall that, after the 2005-06 controversial debt forgiveness, total debt reduced from over $36bn to just $3bn, owed to Multilateral Creditors and about N1trn owed to Local Contractors.

In contrast, debt level rose from N12.06trn (below $40bn) in 2015 to well over $80.2bn in 2019! However, if Local Contractors’ outstanding bills, plus CBN’s ceaseless loans taken, to reduce perennial excess Naira liquidity, are also consolidated with the $9.6bn P&ID award and a fresh loan of $2.5bn, in 2019 budget, are all captured, Nigeria’s total debt may escalate beyond $100bn!

Arguably, the paltry $970m, (N296bn) that Government set aside in 2019 budget, as sinking fund, for debt repayments, will become inadequate to meet repayment schedules. Government may, therefore, become compelled to reduce social welfare and infrastructure expenditure drastically, or alternatively, further increase an already precarious, debt burden, to precipitate serial defaults, in debt repayment and unfortunately, expose us to a second era of imperial oppression!

Consequently, the Attorney General should henceforth, thoroughly scrutinize all existing Government’s agreements and contracts, so that deep holes, such as the P&ID scam can be avoided.

Furthermore, as rightly observed by Etubom Anthony Ani, the execution of Government projects, often become compromised, when Government Officials accept fully paid package tours, cash, or any form of inducement from Contractors, as was the case with NNPC Officials, who coordinated and concluded the LNG agreement with Shell between 1996-97, after Shell allegedly sponsored their fun trip to Jamaica!

Incidentally, after the botched attempt, last year, to get Nigeria’s endorsement of the African Continental Free Trade Agreement (AfCFTA) in South Africa, Vice President, Yemi Osinbajo, sullenly decried the quality of some Agreements to which Nigeria is committed, and, invariably, wondered how any patriotic Nigerian would have endorsed the abiding terms and conditions in such Contracts!

Although, Nigeria finally signed the AfCFTA protocol in Niger Republic, in July 2019, there is no suggestion of what concessions or considerations led to the change of mind. However, the present closure of Nigeria’s borders, despite the promised benefits of free trade, may not be in the spirit of the AfCFTA protocol, endorsed barely eleven weeks ago! (See also “$9.6bn Damages: The Same Fool and His Money” @ www.betternaijanow.com.