Thursday, Jul 9th 2020 9:02 AM

Market Digest Nigeria


Nigerian Newspaper Headlines (23rd September, 2019)

legal battle

The governor of central bank of Nigeria, Godwin Emefiele ,the Attorney general of the federation Abubakar Malami and the inspector general of police Mohammed Adamu led a delegation to the UK for a fresh legal battle against British P& ID Ltd.

Major Nigerian Newspapers have more the story:

legal battle

Punch Newspaper: $9.6bn judgment: Malami, IG, Emefiele lead FG team to UK legal battle

The Attorney General of the Federation, Mr Abubakar Malami; the Inspector-General of Police, Mohammed Adamu, and the Governor of Central Bank of Nigeria, Godwin Emefiele, on Saturday led a  delegation to the United Kingdom for a  fresh legal battle with a British firm, Process and Industrial Developments Ltd on Thursday.

The PUNCH  gathered that other government officials that were  part of the trip included the Minister of Information and Culture, Lai Mohammed, and the acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu.

A British commercial court had in August affirmed the ruling of a London arbitration tribunal, which, in January 2017, awarded $6.6bn arbitral award against Nigeria over an alleged breach of a gas supply and processing agreement signed with P&ID.

The tribunal had ruled that Nigeria was liable for $6.6bn in damages, which increased to about $9.6bn with accruing interest. The Federal Government had, through the Minister of Finance, Budget and National Planning, Zainab Ahmed, on August 26, described the judgment as an assault on all Nigerians. She had  said it was important for all Nigerians to rise up to the task of ensuring that the nation and its citizens were not unfairly treated on the matter.

The minister had said, “This matter that has brought us here today is a very weighty one. An award of $9.6bn is equivalent to N3.5trn. N3.5trn in our annual budget will be covering for us the personnel cost, which is about N3.2trn and more. So, this award is unreasonable, excessive and exorbitant.” On Thursday, the British firm will return to the court to make  a final push for the seizure of $9.6bn Nigerian  assets, wherever they may be in the world. But in a telephone interview  with journalists on Sunday, the Attorney General of the Federation  said the Federal Government was still considering all options in its  efforts at upturning the judgment of the UK  court.

Malami was asked whether the government would be filing a new case based on recent developments, especially the conviction it secured against the firm in Abuja on Thursday or would build on the previous judgment. Two representatives of the P&ID had on Thursday pleaded guilty before the Federal High Court in Abuja to charges of fraud and tax evasion instituted against them in respect of the contract leading to the controversial judgment.

On Sunday, the Minister of Justice said the government would adopt the option that would be most beneficial. He said,  “All cards are on the table, but it all depends on the one that has potency for setting aside the award having regards to the applicable law in the circumstances.”

Malami made it clear that the government team was not ruling out any possibility in tackling the issue. He said, “No possibility is ruled out. The options available to us include the possibility of filing a new case and or using existing proceedings to seek relief of setting aside the award (of the contract). Nothing can be ruled out.”

He also confirmed that the Nigerian delegation had left for the UK to discuss with the nation’s legal team. He said talks between the government’s delegation and the legal team would consider strategies to be adopted in dealing with the matter.

Malami had told Saturday PUNCH on Friday that the case had yet to reach an appeal level, but at the stage of determining whether or not the P&ID should be allowed to enforce the award of $9.6bn by an arbitration panel against  Nigeria. He said the Federal Government would tender before the court evidence that the Gas Supply Processing Agreement signed in 2010, which led to the judgment of the British court, was rooted in fraud and corrupt practices.

The minister said although the court had ruled that Nigeria should pay P&ID  $9.6bn, it had yet to grant the firm the go-ahead to seize  Nigeria’s assets in enforcement of the award given in favour of the firm. The AGF said the Federal Government would tender, among others, the investigative report of the EFCC as well as Thursday’s judgment of the Federal High Court in Abuja, convicting P&ID Limited, which was incorporated in the British Virgin Island, and its Nigerian affiliate of fraud.

The AGF said the government would also tender the charges pending against firms and individuals who played one role or the other in the alleged fraudulent GSPA. Malami had said, “It has not got to any appeal stage as such. The arbitral panel had no enforcement power. So, when an award is made you have to approach the conventional court for the enforcement of the award. “What they (P&ID) did was to approach the conventional court for the enforcement of the award. “The conventional court said it was not going to give an order for the enforcement of the order until they were heard. “They had wanted an order ex parte without putting us on notice to attach (for seizure) our assets. But the court said it would have to hear from the other side (Nigeria) in the enforcement proceedings.  “The court fixed September 26 for the hearing of arguments by the parties  to determine whether to allow for the enforcement or not to allow the enforcement.

“So, it is not about an appeal now. The court’s pronouncement as to what amount of money to be paid has been made by the court. “They approached the court to allow them to attach Nigerian assets in fulfillment of the award that was granted. The court fixed September 26 for the entertainment of arguments as to whether or not it would allow the attachment of Nigeria’s assets. “So, we are going to the British court to argue that they should not be granted the power to attach the assets. “The only thing that can be of help to Nigeria in stopping the enforcement of the entire award is proof of corrupt practices as the basis for the arbitral award.

“So, we called for investigation as to the relationship between local partners component and international partners component. “And arising from the proof of evidence that we have in support of the charges that were filed by the EFCC, there is evidence that money changed hands between international partners and officials of the Federal Ministry of Petroleum Resources influencing things that had to do with the agreement, influencing the formation of the agreement, influencing what clauses should go into the agreement, influencing the officials to ensure the by-passing of the vetting by the Federal Ministry of Justice, influencing the by-passing of the presentation of the agreement before the Federal Executive Council. “So, we have at our disposal proof that they sent money to Nigerian officials, and in return for the money that was sent to Nigerian officials, there was a compromise all through the creation of a fraudulent and deceitful agreement. “Some of them have now pleaded guilty. So we are now armed with investigation report establishing corrupt practices. We are now armed with charges pending before the court arising from the fraudulent agreement.”

legal battle

Guardian Newspaper: How poverty worsened despite Nigeria’s N28.58 trillion revenue

Stakeholders in the economy yesterday expressed worry about the disparity between huge government earnings and growing poverty in the country.

This followed the report by the Nigeria Extractive Industries Transparency Initiative (NEITI) showing that N28.58 trillion was remitted to the Federation Account between 2012 and 2016.

NEITI’s latest Fiscal Allocation and Statutory Disbursement (FASD) Audit report for the period shows that of the N28.58 trillion, mineral sources contributed the highest sum of N18.15 trillion (after deductions for joint venture cash calls and subsidy claims), representing 64 per cent of the total earnings. This was followed by non-mineral source (N6.68 trillion), representing 23 per cent, while Value Added Tax (VAT) was N3.73 trillion, representing 13 per cent.

A year-by-year breakdown of the total remittances showed that N4.19 trillion was remitted in 2012; N4.73 trillion in 2013; N4.69 trillion, 2014; N2.89 trillion, 2015; and N1.65 trillion in 2016.

An analysis of the N18.16 trillion mineral revenues shared among the three tiers of government showed that the Federal Government received N8.32 trillion from 2012 to 2016; the 36 state governments shared N4.22 trillion, and the 774 local government areas got N3.25 trillion. This is exclusive of the N2.36 trillion 13 per cent derivation to the oil, gas, and mining producing states.

The report also disclosed that from the share of non-mineral revenue of N6.68 trillion, the Federal Government received N3.52 trillion, the 36 states got N1.79 trillion, and the local government areas took N1.38 trillion. The total VAT revenue of N3.73 trillion was shared as follows: Federal Government (N560 billion), 36 states (N1.88 trillion) and 774 local governments (N1.31 trillion). “Unfortunately, the country remains economically dependent on less-endowed countries because of the less than optimal use of natural resources, made up mostly of products from the extractive industry,” said Prof. Segun Ajibola, former president of the Chartered Institute of Bankers of Nigeria.

He further blamed the country’s slow growth and development on its “perverse spending pattern, corruption in high places and misplacement of priorities.”

On his part, Prof. Adeola Adenikinju regretted that a few privileged people were mortgaging the nation’s wealth. The director, Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, noted that without corresponding increase in other assets such as human capital, physical capital and financial capital, the living standards of future generations could be jeopardised. “It is sub-optimal to look for an increase in revenue through the expansion of taxes without first resolving the inefficiency and waste in the use of existing revenues. We live in a country characterised by heightened insecurity, dilapidated infrastructure, mounting unemployment and poverty, and decline in many welfare indicators. We need, as a country, to reflect and recalibrate our development strategy,” he said.

Idayat Hassan, who is the director, Centre for Democracy and Development (CDD), maintained that the offices of elected persons were costing the country a fortune. According to her, “Things have to change because 20 years of democracy is enough time for the citizenry to enjoy the dividends of democracy.”

Dr. Ndubuisi Nwokolo, Senior Policy, and Research Lead at Nextier SPD, an international development consulting firm, took Hassan’s observation further, noting: “The cost of sustaining our bureaucracy is obviously very high. For instance, the 2019 budget has non-recurrent expenditure such as salaries, overheads, and other recurrent items account for 46 per cent of the total expenditure of N8.92 trillion. “Considering the level of poverty in the country and the fact that the government is the highest employer, it may be wrong to cut down the size of bureaucracy without having a strong and robust private sector-driven economy, which can employ the majority of its citizens.”

Similarly, Managing Partner, Chancery Associates, Emeka Okwuosa, said: “The cost of governance has to be drastically whittled down. Bureaucracy has to be streamlined and we have to intensify the fight against corruption. We have to change our mindset about governance and start realising that we are servants of the people and not vice versa.”

But a former Chairman of NEITI, Ledum Mitee, had words of advice for the watchdog agency. Figures of monetary allocations for projects should be linked to what has been achieved, he suggested. “That was why during our time in NEITI, we published the first Fiscal Allocations and Statutory Disbursements Audit, which tracked the extractive revenues to the actual projects. I would still recommend that report to the national and state Assemblies and other stakeholders. I would further recommend that NEITI embark on such exercise and improve on it, and also include local governments into such audits as was approved by the Jonathan administration.”

According to Mitee, it is important for citizens to use such results to hold governments accountable. If citizens do not pressure governments on the outcome of works by NEITI and other agencies, the expected benefits might not be achieved, he added.

In another comment on the nation’s economy, Prof. Pat Utomi urged the government to be discreet about pursuing revenue. “There is, of course, the tax angle. Revenue do not make a nation wealthy. What makes a nation wealthy is a production. With the way we are chasing revenue, we will prevent people from producing and ultimately democratise poverty,” he said.

The professor of political economy disclosed this during the ‘Empowered to Break Frontiers’ workshop organised by the Redeemed Christian Church of God, Faithful Chapel, Lagos, at the weekend.

Sun Newspaper: 2023: Trouble for Osinbajo

A plot to remove Vice President Yemi Osinbajo gathered momentum at the weekend, with some allegations against him dating back to when he was acting president in May 2017, when President Muhammadu Buhari was in the United Kingdom on medical leave, consequent upon Section 145 of the 1999 Constitution (as amended).

Some of the allegations against him were that, as acting president, Osinbajo “authorised payment of N5.9 billion to NEMA (National Emergency Management Agency) without approval from the National Assembly. “Although he is chairman of the governing board of NEMA, he still needed parliamentary approval before money could be taken from the Consolidated Revenue Fund. He didn’t pass through the normal channel. “Again, he signed for N25 billion for NNPC (Nigerian National Petroleum Corporation), as ‘funding contract.’ He had no such powers,” said a security.

There are also allegations that disbursement of funds by the Federal Government-backed Social Investment Programme (SIP) domicilled in Osinbajo’s office were not transparent, with allegations of “traces of money exchanging hands between him and the FIRS boss.” However, a Presidency source who declined to be named because he was not authorised to speak on the matter dismissed the allegations as “recycled.”

He said: “The issues have not changed from the position that the House of Representatives Committee on Emergency and Disaster Preparedness report never indicted Osinbajo of corruption,” and insisted that attempts to resuscitate the allegations are “mere political contrivances intended to distract him.”

In November 2018, also on the same issue, a presidential political adviser, Senator Babafemi Ojudu, said the opposition was merely “in search of company for their acts of grand corruption, which brought Nigeria to its knees as of May 2015. “Even the House Committee chairman has said there was no allegation of corruption against him.” Another Presidency source simply dismissed the allegations as “part of the smear campaign. Absolute falsehood.”

Also, last Friday, in Ekiti State, during the burial of Mrs. Moroluke Fakoyede, mother of the secretary of the Economic and Financial Crimes Commission, Mr. Ola Olukoyede, at St. Luke’s Anglican Church, Ikere-Ekiti, Osinbajo said there were saboteurs and fifth columnists working against government’s plan to develop the country.

Regardless, possible replacements for Osinbajo are being assessed and top on the list are two candidates from the South West. The vice president is from the South West (Ogun State) and is also a pastor of the Redeemed Christian Church of God. In shopping for his replacement, two Christians are being considered, with a serving governor in the region topping the list, as at last Wednesday.

A former governor from the South West was also considered but was knocked off the list because of the need to ensure “religion balancing.” Meanwhile, another source in the Federal Capital Territory said the allegations against Osinbajo were all about political permutations ahead of the 2023 presidential election.

He said despite being the highest ranking South West politically-exposed person in the ruling government now, and since “he does not control any political bloc in the region, there is need for realignment of forces hitherto deployed in the region,” in previous elections for the All Progressives Congress (APC), as an ally of the North. “Osinbajo has no political base in Yorubaland. The recent ministerial, board appointments from the region went through another ally who is now a big player in Abuja. The young Turks from the South West are ready to go into a new alliance with the North,” he said.

To gain foothold, if and when Osinbajo is removed, the new political realignment would see the new leaders paving the way for a northern presidential candidate in the APC and the People’s Democratic Party.

A source who was privy to the plan explained: “The North will present candidates for the presidency in APC and PDP. The South West is automatically ruled out because Osinbajo has been elected twice now, with Buhari. The South East and the South South are now the beautiful brides for Vice President.”

A former governor further explained why the North will present candidates in APC and PDP. “In arriving as to why the North should be allowed to contest for the Presidency in 2023, let us go back to 1999. “The South West had its constitutional eight years with former President Olusegun Obasanjo. In the spirit of balance and rotation, the presidency moved to the North. “Now,  in 2007, it was the turn of the North, with late President Umaru Musa’Yar’Adua, who did not complete his four-year tenure before he died in May 2010. “If he had lived, he would have had the right of first refusal in 2011. His first four-year tenure was completed by his deputy then (Dr. Goodluck Jonathan.), who went on to contest in 2011 and left in 2015.

“The eight years of the North was not completed because the South South took it, having jettisoned an earlier agreement. “Now, it would only be fair if you allow the North have another shot at the presidency. “Besides, the 2019 general election has shown the underbelly of the South West. “Lagos, which had the highest number of voters, going into the general election, could not even muster 1 million votes for Mr. President; yet, Borno that was even bombed on the day of election, saw people trooping out to vote for APC overwhelmingly. Kano lived up to its billing by giving APC more votes than Lagos. “So, in terms of comparative advantage, if APC is to continue at the centre, it’s best to have a presidential candidate from the North and balance it with a vice president from the South East since South South has ruled before. The rotation principle can be applied after 2027 and not before,” he argued.

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