*They do this first before seeking President, FEC approval
*Loan terms also negotiated before seeking NASS approval
*Amaechi disagrees, insists probe of rail projects will hinder success
As the House of Representatives continue to probe loans and commercial agreements signed by the federal government, some members of the House have accused government officials of signing empty pages of such agreements.
The Chairman, House Committee on Treaties, Protocols and Agreements, Hon. Ossai Nicholas Ossai who spoke at an investigative hearing on external loans and commercial agreements, said government agencies sign commercial agreements in billions of dollars before going to the Federal Executive Council, FEC for approval to execute them.
According to him, the officials negotiate the terms of the loans before going to the President who in turn approaches the National Assembly for approval of loans for projects without attaching any details of the loans and their agreements.
He said despite the fact that the Federal Government in 2014 signed an Executive Order providing guidelines on waiver of sovereign immunity during loan and commercial agreement negotiations, government officials had been violating the order.
The Chairman further stated that the controversial clauses and agreements had been in existence before the Muhammadu Buhari-led regime, explaining that the probe was not about the ruling All Progressives Congress, APC or the Peoples Democratic Party, PDP that have ruled the country since Nigeria rejoined the comity of democratic nations in 1999.
He insisted that the lawmakers’ probe was not limited to Chinese loans and commercial contracts, saying: “We will like Nigerians to know that we are not focusing on only Chinese loans.”
He added: “From what we know, Nigeria has over 500 bilateral loan/commercial contract agreements and investment treaties with different countries and institutions. There is no way the Committee will do a thorough job without segmenting the issues based on countries, institutions or Ministries, Departments and Agencies, MDAs..”
He continued: “The loan agreements we have seen so far show that government officials charged with the responsibility of representing Nigeria in these issues are more desperate to just take the loans at any condition, possibly using non-negotiated loan agreement templates rather than go through the rigour of diligent technical review of negotiating specific clauses with clarity and for national interest.”
The Chairman further said that it was a common practice that most international loan agreements would adopt ‘sovereign guarantee’ and a neutral international arbitration centre.
“Even in situations where countries, out of desperation and weak economic position waive their national sovereignty in bilateral or contractual agreements, the immunity of sovereignty waiver clause will usually be clear and categorically state specific assets associated with the loans for takeover in the event of default.
“This approach is the reason we have government representatives signing empty pages of loan agreements, repayment schedule and other key documents required for the loan agreements to become effective.
“We have commercial contracts signed in US dollars, while the loan agreements for the execution of the same contracts were signed in Chinese Yen currency in the Ministry of Communications and Digital Economy/Galaxy Backbone Limited.”
He added: “Most of these commercial contract agreements did not also have local content clauses and were witnessed by non-properly designated and authorised officials.”
Speaking further, Hon. Ossai also accused the Ministry of Transportation of awarding contracts for the construction of railways to the tune of $33 billion without local content clauses or having authorised officials as witnesses.
“We have noticed from documents available to us that commercial contracts prices signed by the Federal Ministry of Transportation alone are over $33 billion without any clear cut financing arrangements.
“Most of these commercial contract agreements didn’t also have local content clauses and more witnessed by non-properly designated and authorized officials.
“There are observable issues relating to the procurement process, evidence of 15 percent advanced payments, payment of management fees, drawdown process and remittances and a whole lot of other matters, which we are strongly poised to ask questions on and hope to get honest answers that will fine-tune the current process, plan for the possible renegotiation of some of these agreements in order to serve Nigerians better,” the chairman added.
However, the Minister of Transportation, Rotimi Amaechi refuted the allegations, stressing that local content laws were not breached, insisting that frequent probe of the rail project will hinder its success.
He said there are over 20,000 workers and only 560 of them are Chinese, saying “we need to begin to say the truth. It’s good to tell Nigerians the truth, this very political and we will show all the contracts awarded by the PDP government.”
But a document before the Committee shows that the Ministry of Transportation under Amaechi violated the Local Content Act, insisting that only 14,273 Nigerians were employed for the construction of the Lagos-Ibadan rail project as against over 20,000 claimed by the Minister.
In the document signed by the Director of Legal Services of the Ministry of Transportation, Mr. Pius Oteh, it was also uncovered that 596 Chinese instead of 560 claimed by Amaechi which is over 40 per cent provided for in the Local Content Act, are occupying the positions ought to have been for Nigerian employees working on the project.