In 2010, Nigeria agreed a $9.6billion gas deal with a dodgy, questionable foreign company. That deal has now come back to haunt the West African nation.
TheMuhammadu Buhariled Federal Government of Nigeria is doing everything to avoid paying the sum of $9.6bn owedProcess & Industrial Development Limited (P&ID),a British Virgin Islands-based engineering firm.
In 2010, P&ID entered a 20-year gas contract with Nigeria. Under the terms of the contract, the company was supposed to build and operate a plant to refine natural gas into “lean gas” in Calabar, the Cross River State capital.
The gas was being flared in the Niger Delta anyway; and the federal government thought it was good business to have a company convert some of that wasted, poisonous gas into electricity in the face of Nigeria’s perennial power woes.
The contract also stated that the government would install the necessary pipelines and infrastructure and receive the lean gas free of charge to power Nigeria’s fragile national grid, the company said.
P&ID would then sell the by-products of propane, ethane and butane on the international market.
A contract that was never executed
For some reason, the contract was never executed. In 2012, P&ID dragged Nigeria to court, alleging breach of contract.
In August of 2019, P&ID won its case against Nigeria.
Initially awarded for $6.6 billion, the contract sum would rise to $9.6 billion due to accrued interest since 2013.
Whose administration signed this contract?
According to theNew York Times (NYT),government officials said the contract was signed while late presidentUmaru Musa Yar’Aduawas critically ill andGoodluck Jonathanwas acting president.
Johnathan has denied any knowledge of the contract.
The court case in Nigeria
On September 19, 2019, a Federal High Court in Abuja convicted two of P&ID’s representatives in Nigeria of charges bordering on money laundering, abuse of office and economic sabotage.
The court also ordered P&ID to forfeit all its assets to the Nigerian government.
The company representatives had pleaded guilty to 11 counts of fraud, money laundering, tax evasion and other charges.
Attorney General Abubakar Malamisays the contract had been signed with no clear terms and conditions and that it“was engineered to fail”and defraud Nigeria.
“No country can sit idle when this type of case is calling,”saysInformation Minister Lai Mohammed.
P&ID rejects Nigeria court judgment
P&ID has called the judgment of the court in Nigeria a “sham” and a clear case of intimidation by the state.
“Today’s sham trial in Nigeria is entirely illegitimate and follows a systematic campaign of harassment, intimidation and illegal detention of a number of individuals associated with P&ID. The people had been intimidated by the government into making false statements,”the company said in a statement.
P&ID said none of the individuals convicted are current employees. The firm also stated that it hasn’t received communication from Nigerian authorities about the investigations.
The company said it will continue its efforts to identify and seize Nigerian assets to recover its money.
Nigeria heads to the UK to beg
On Thursday, September 26, 2019, a federal government delegation will head to the UK to persuade a British court to set aside an order permitting P&ID to seize $9.6 billion worth of assets from Nigeria, since the cash equivalent is not forthcoming.
The federal government delegation will include the Attorney General,Central Bank Governor Godwin EmefieleandInspector General of Police Mohammed Adamu.
This is“about not allowing a case based on fraudulence to proceed,”Malami was quoted as saying by NYT.
Emefiele has warned of“advanced consequences for the Nigerian economy”if P&ID is allowed to seize Nigeria’s assets.
For context, $9.6 billion is one-third of Nigeria’s 2020 budget.Bloombergestimates that the amount is enough to fund Nigeria’s school system for seven years.