The Federal government has been urged to set up a high-level crises response team made up of Central bank of Nigeria (CBN), Nigeria National Petroleum Corporation and Ministry of justice, in response to Nigeria’s major loss at a British court on Friday over $9 billion damages for failing to honour a contract.
According to stakeholders familiar with Nigeria’s economic situation, the aim of the high-level response team is to calm the nerve of foreign investors, as Process and Industrial Development Limited (P&ID) who won the judgement in London, might resort to going after Nigeria’s Eurobond custodian; a development which could have a devastating blow to the credit rating of the country, derail the 2018 budget and plunge the economy back into recession.
According to sources, government agencies such as CBN, NNPC and ministry of justice needs to speak with one voice and calm foreign investors who are currently jittery about the current development and also reassure them they are taking the right steps to resolve the matter as $9 billion still under the government’s control in respects to Nigeria’s total assets.
Sources tell BusinessDay that the situation in Nigeria is not new as it is similar to what happenned in Republic of Congo in 2017, which had a sovereign debt default after the latest coupon payment on its $363 million Eurobond was frozen amid a decades-old legal dispute over a $1 billion debt to a local construction company.
Stakeholders believed it was also foolish for Nigeria’s solicitor general Dayo Apata to claim it inherited the situation from previous administrations because the government is a Going Concern, as the statement is making Nigeria a laughing stock among international community.
Foreign investors see the response from the permanent secretary, federal ministry of Justice as “suicidally, unintelligently arrogant.”
Investors were quite surprised about government silence and denial of the matter since the issues first began only to start responding after the court had given its judgment.
Lawyers representing Nigeria, Africa’s largest economy, had argued that the arbitration award should not be enforced because it was “manifestly excessive and penal”, and that the UK was not the right jurisdiction for the case.
Justice Butcher rejected the government’s arguments.
The Nigerian government has yet to make any payment, and “has not applied to set it aside in any jurisdiction”, according to the ruling.