Minister of Transportation, Rotimi Amaechi, has lambasted Nigetians didn’t understand that the clause ‘waiving sovereignty’ in the loan agreement between Nigeria and China is only a contract term.
According to the Minister, the clause is 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, monitored by Grassroots.ng.
He argued that the Ministry of Transportation is only responsible for implementing projects and not taking loans
According to Amaechi, “it is a commercial agreement; a trade agreement between Nigeria and China. The first issue is that the 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.
“No country will sign away its sovereignty. 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 use my immunity and say no, you cannot touch our assets, we are a sovereign country.
“Is China our father that will give us money for free? 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 throw your immunity on me (the lender) when I come to collect back the guarantee you put forward, that’s all.
“The waiving of immunity simply means in trade parlance that I’m not giving you this loan free.
“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. The Chinese can never come and take over Aso rock and become President or Minister.
“In the event of a default, Amaechi stated that the lender can only go after, and take back the same assets built with the loaned funds.
“And if the assets you put down become depreciated, then you negotiate which assets they can go after. The Chinese will never take over what was not constructed with the loan.”
Zambia’s fate fear
Allaying the fear of some Nigerians asking if it’s possible to repay the loan and not get into the same situation as Zambia, 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 percent, 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. At any point in time that we need to pay, we pay.”
The Minister further explained that the loans are 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.
Amaechi also reiterated his call to the National Assembly to put a hold on the probe as some loans are still being expected for the completion of Lagos to Ibadan and the construction of Ibadan to Kano and Port Harcourt to Maiduguri rail.