Amaechi explains sovereignty clause in Chinese railways’ $ 500 million loan
The Minister of Transport, Rotimi Amaechi, explained that the “waiver of sovereignty” clause in the loan agreement between Nigeria and China is only a contractual clause, a sovereign guarantee that ensures repayment according to the terms and conditions of any loan. .
Mr Amaechi provided clarification this weekend by answering questions about the loan controversy on a TV show.
He also explained that the Ministry of Transport is not responsible for taking out loans, but implementing the project or contract for which the loans were taken.
He said, “This is a trade deal, it is a trade deal between Nigeria and China. The first problem is that the Department of Transport does not take a loan. Anything related to the loan, talk to the Ministry of Finance. What I signed is what they call a commercial contract, which is a contract between the federal government and CCECC as an entrepreneur.
“The contract between Nigeria and China is usually signed by the Ministry of Finance on behalf of Nigeria, but that will escape the problem. Whether it is the Minister of Finance who signed it or the Minister of Transport, the stakes are the stakes. There is no contract without an agreement and there must be certain terms in that agreement and one of the terms in this one is not that you give up sovereignty of the country. No country will give up its sovereignty. What you do is give a sovereign guarantee; and I am ashamed of those who misinterpret it.
“Now when you say ‘I give you a sovereign guarantee and I waive this immunity clause, the immunity clause is that if tomorrow I’m not able to pay you and you come and collect the items on which we agreed, that these are things that I put down as collateral, I can use my immunity and say no, you cannot touch our assets, we are a sovereign country. China is- her our father who will give us money for free? They (the Chinese) say, if you are not able to pay, please do not prevent us from taking back these items which will help us recover our funds. a standard clause, whether it’s with America that you signed it or with Britain or any country, because they want to know they can get their money back. this is to tell you that I expect you to pay under these terms and conditions. If you do not pay, no Don’t throw your immunity on me (the lender) when I come to collect the collateral you put forward, that’s all.
“The waiver of immunity just means in commercial jargon that I am not giving you this loan for free. Just like if you’re going to take a loan from the bank, the moment you don’t pay, they prey on the assets you deposit. And people are politicizing it. The Chinese will never be able to come and seize Aso rock and become president or minister.
In the event of default, Amaechi said the lender can only sue and take back the same assets built with the loaned funds. “And if the assets that you deposit depreciate, then you trade the assets that they can recover. The Chinese will never take back what was not built with the loan.
Allaying the fears of some Nigerians to ask if it is possible to repay the loan and not end up in the same situation as Zambia, Amaechi said the loan was already being repaid.
“But we pay,” he said. “In the same National Assembly committee, they were told that out of the $ 500 million, we have already paid $ 96 million. Nigeria is already paying… So it’s not that Nigeria doesn’t have the capacity to repay. We will refund. At 2.8%, what other country would give you this loan? 2.8% for 20 years with a 7-year moratorium, why can’t you repay? The repayment plan is not done by us, it is done by the Department of Finance, but they meet the requirements. Anytime we have to pay, we pay.
The minister further explained that the loans are not disbursed to him or to the ministry, which automatically eliminates any fear of corruption or embezzlement. They are paid directly to the contractor in China.
“I told them during this meeting that these loans are not granted to us, they are paid directly to the entrepreneur. Once we sign that the job has been done, they pay the contractor. And this has never been done before. What is therefore essential is that the projects are carried out. Or are they trying to flout the fact that there is an Abuja-Kaduna railway?
“These (Chinese) loans don’t get paid here, so you can’t even steal them. What we do is make sure the job gets done. We hired an Italian company to support our engineers in the ministry to make sure that the Chinese meet the European standard, so that there is no fake or poorly done work. When they check and say yes, it was done and done to the standard of the approved contract, and then they pass it on to us, we sign and approve that the job has been done. It is then sent to the Ministry of Finance which also affixes its signature and transmits it to the Chinese bank Exim which then pays the contractor. “
“Work is linked to development. If you don’t, you don’t get paid. So the entrepreneur would want to do the job, he wants to satisfy his client, so that the client can sign off to say that he has done the job.
Mr Amaechi also reiterated his call for the National Assembly to suspend the investigation as some loans were still expected for the completion of Lagos to Ibadan and the construction of the railway from Ibadan to Kano and Port. Harcourt in Maiduguri.
“There is an agreement for Abuja in Kaduna which was signed before our arrival, we have signed the Lagos in Ibadan, we want to sign the Ibadan in Kano. Now we have also requested that they give us a loan from Port Harcourt to Maiduguri implying that when the loan is approved we will build the rail from Port Harcourt to Aba to Owerri to Umuahia to Enugu to Makurdi to Lafia to Jos to Bauchi to Gombe then to Damaturu. Everyone is shouting that there is no railroad in the Southeast. But there is railroad in the South South. He said, noting that the Itakpe in Warri which had been abandoned for 34 years was completed without taking out a loan. He stressed that the National Assembly and the country should at least understand that the government is making progress in terms of infrastructure development.
“So what should be of the utmost importance to them is the national interest, because we have to build Lagos in Ibadan to be able to evacuate the cargoes coming from Lagos to the hinterland. So what they are doing now Likewise, the government is under pressure to build Port Harcourt in Maiduguri which crosses the southeastern and northeastern states.
“If we leave now and the Chinese say ‘we won’t give you the money because the government arm that is supposed to approve this loan they have already approved starts to question the loan they approved , we’re not sure we can get the loan back, “so we can’t finish our projects,” Amaechi said.
He further explained that all loan requests go through the National Assembly for approval and wondered why they were investigating them. He added that he would have loved to publish these clauses without the issue of confidentiality in government, stating that the National Assembly is aware of the clauses because it is unconstitutional to take out a loan that is not approved by the government. National Assembly.
“The National Assembly is aware of all these loans, so ask why they are investigating. The Chinese are just asking us to show them the proof that we will repay which is the immunity clause, if we don’t pay they can take back their assets and remember we can’t borrow without the National Approval of the Assembly.
“There is no loan in Nigeria, whether internal or external, that is not approved by the National Assembly, none. The Chinese government will not even give you a loan without the approval of the National Assembly, because if it gives you a loan without the approval of NASS, it is not a loan.
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