(A rejoinder by Etubom Anthony A. Ani – Minister for Finance – 1994-98)

By Henry Boyo

“As Finance Minister in 1993-1998, I did not enter into any loan agreement since Nigeria did not borrow internally or externally during my tenure. However, I had the opportunity of verifying, analyzing and reassessing the Nation’s debt profile and this involved reading the debt agreements, these were very pathetic and heart-rendering.”

“The Nigerian negotiators surrendered their sovereignty to lenders, they put their Embassies abroad as securities and even used our foreign reserves as securities. When a lender or contractor comes to negotiate with Nigeria, he employs the best Lawyers, the topmost Accountant, very good Economist but Nigerian Negotiators go with nothing and in many cases, we sign the agreement without thinking after receiving token bribes and staying in luxurious hotels packed with women.”


“A typical example that happened during my time was the Nigerian LNG Project. Towards the end of 1994, the World Bank on the instigation of the United States of America withdrew their participation from the project in the hope that the project will collapse and be discontinued. Our budgeted revenue from oil after deducting joint venture contribution and debt servicing charge was not up to $5bn between 1995 and 1997 yet I had to look for funds to fill the gaps created by the withdrawal of the World Bank and by 1996, I had successfully filled this gap through monthly standing orders paid directly to Shell Oil Company Ltd, the project coordinator.”

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“In 1996/97, when the contract for the LNG project was to be negotiated, the Ministry of Finance was not invited or involved. I had chosen a team made up of the Accountant General of the Federation, the chairman of the Federal Inland Revenue, the Director of External Finance, the Director of Special Duties and the Legal Adviser to represent the Ministry with specific remit to look into the tax structure of the project and the financing of the whole project particularly the shipping line.

Shell invited NNPC to an island in West Indies where a bogus agreement was entered into and that is why everything with LNG today is opaque. The Ministry of Finance was never involved with the negotiation of the LNG project. I brought this matter to the attention of the Head of State, General Sani Abacha, and I had to issue a circular that the Federal government will not pay for any foreign currency denominated contract negotiated without the involvement of the Ministry of Finance.”

“Invariably, when these bogus contracts are subsequently reviewed one can see the damage done to Nigeria and there is the urge to change the contract but it is too late. The next stage is to frustrate the contract and the result is arbitration and even because of our carelessness, the arbitration is never in Nigeria’s favour.

The present award of $9.6bn to P&ID (the Irish Contractor) is not strictly a legal matter but a very serious financial consequence yet Nigeria has not appointed any top firm of financial and actuarial consultants to look into the award in all its ramifications and advise the government.

I have not read the agreement with P&ID or the arbitral award of $6.3bn being the estimated profit the company would make in the lifespan of the contract estimated to last for 20 years. In addition, there is a cumulative interest of $3.3bn. The award was made in 2014 when the project had not even started. No one knows whether the project would have been completed in September 2019. The award was made by arbitration, the membership of which was agreed by the Nigerian government although the Nigerian representative awarded only $250m.

The British High Court has confirmed the award of $9.6bn and Nigeria is appealing to the British court of appeal. We have been fed with stories that the contract was fraudulently obtained but I do not know whether this can be argued in the Court of Appeal if it was not pleaded in the Court below. I suppose what we are appealing against is the excessiveness of the $9.6bn being the expected total profits of 20 years to come.

Apart from other financial information that may be gleaned from the contract agreement and the arbitration award, any seasoned Chartered Accountant or Financial or Actuarial Consultant will first of all look for the present-day value of $9.6bn re-envisaged in 20 years at the rate of interest used by the Court to calculate the interest of $3.3bn. It will be found that discounted amount will be minimal and this is the figure on which interest would be charged and we should use this to appeal at that Court of Appeal. Anything short of this will be a waste of Court of Appeal time.”

“I advise the Government as a matter of urgency to employ the Consultants I have suggested above to carry out the assignment. In addition, the government should set up a contract vetting division in the Ministry of Justice where all government contracts particularly those involving foreign currency must be vetted before signature. This must apply to all MDAs. Additionally, the Government must ensure that the Ministry of Finance must be involved in all contracts involving foreign exchange. I can bet that the Ministry of Finance was not involved in the P&ID contract arrangement.”


In retrospect, Nigeria’s rapid debt accumulation in the last four years, is, clearly significant, especially, when compared with 1994-98, when Nigeria climbed out of negative growth of -10 per cent, and steadily recorded positive growth rates thereafter, while the Naira exchange rate remained stable at N82=$1.

Furthermore, despite the trying times, the economy was managed, with astute financial discipline, without a single kobo addition to National Debt. In contrast, total debt, presently, stands at $81.27bn from about $27bn total debt by 1998.

Nevertheless, Nigeria’s total debt may actually exceed $100bn, if outstanding contractors’ bills, and CBN’s debt obligations from ceaseless borrowings, to reduce perennial excess Naira liquidity, plus the $9.6bn award and a fresh loan requirement of $2.5bn in 2019 budget are all captured.

Obviously, the paltry $970m, (N296bn) that government set aside, in 2019, as sinking fund for debt repayments, will clearly, be inadequate to meet repayment schedules, and Government may, ultimately, become compelled to reduce expenditure, drastically, or alternatively, further increase an already precarious, debt burden! Predictably, serial defaults in debt repayment, will attract serious consequences that would threaten our independence, and leave wide-open gates for the second era of imperialistic control!

It is, therefore, recommended that the Attorney General should, henceforth, scrutinize existing agreements and contracts, endorsed by Government, to ensure that we never again fall into such deep holes, like in the P&ID case.


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