GRACIOUS and humane creditors? Or how else can we describe the gesture of Zhongshan Fucheng Industrial Investment Co. Limited who are on the winning side, at least for now, of an arbitration dispute with Nigeria. The company has a standing Paris court order with which it impounded three of Nigeria’s presidential jets.
They were grounded in France where two of the aircraft had gone for servicing. The third, a recently acquired Airbus, Nigerian president, Alhaji Bola Ahmed Tinubu’s latest luxury toy, was reportedly flown to France for retrofitting and sundry luxury upgrades to suit the status and taste of the ruler of the country which since 2019 has been designated as the global capital for the abject poor.
There’s no evidence yet that our ruler who is reported by one of his array of official spokespersons, Chief Ajuri Ngalela, as denying himself of sleep and working his socks out since his accession to the presidency on May 29, 2023, to make Nigeria great had even taken a ride inside the Airbus before it was seized. What an insult! What temerity by the Chinese. Sorry. They are our creditors with sizeable credits in their favour and the disposition to lend us more given our insatiable appetite for foreign loans.
In their contests with some other countries, the Chinese are known to adopt the fearsome style of wolf warrior diplomacy. Somehow this Chinese company is adopting the stick and the carrot approach in its dispute with Nigeria. This is surprising because in China, companies that are big enough to play in the international arena enjoy subtle or glaring Chinese state backing. Indeed some of such firms are actually owned by the state.
So it was interesting and curious when on Friday last week Zhongshan issued a public statement saying that it would grant a waiver by releasing the new presidential toy, the Airbus, to be flown to Nigeria to pick up Tinubu for a prior scheduled trip to Paris to meet with the French president, Emmanuel Macron this week.
The statement was silent on whether it would be a short or long lease. And whether it would be a dry or wet lease. If it is a wet lease then the Chinese will provide the captain, the co-pilot and the crew. They will fly the bird into Abuja, pick up the president and his entourage, fly them to Paris, wait for them to finish the meeting with Macron and his team, and then ferry them back to Nigeria. The Chinese may not be that generous to indulge Tinubu with globe-trotting as he’s usually wont to during his frequent foreign trips in search of investors. By the way, the United Nations General Assembly (UNGA) which attendance is a jamboree for Nigerian government officials is afoot.
Hopefully, Zhongshan will grant us the indulgence of using the Airbus to New York next month. The Chinese company had seized a Dassault Falcon 7X, a Boeing 737-7NG/BBJ, and an Airbus A330-243 belonging to Nigeria’s presidential fleet but were at the material time at Paris -Le Bourget and Basel-Mulhouse airports in France.
If Tinubu actually travels this week to Paris in the Airbus aircraft it would mark yet another low in the life of this regime. It will be a humiliation no matter how much efforts his spin doctors will try to put a gloss to it as a diplomatic victory. Furthermore, it should be concerning that a foreign, and probably a low level Chinese company, has fore knowledge of the travelling plans of the ruler of the ‘giant of Africa’. And to imagine that they knew about it well ahead of Nigerians, and I dare say, the kitchen cabinet and cabal in the Presidential Villa. This is staggering in its
enormity.
Apparently determined to magnify its generosity and to leave no one in doubt about the gesture foreshadowing the release of the aircraft, the Chinese company wrote in part that it had “consistently sought to act reasonably and fairly in the course of a legal dispute with Nigeria which was not of its making”. In plain language the company was saying that Nigeria brought this predicament upon itself. It said that it has “now been made aware that an Airbus A330, currently detained in France as a result of a French court order obtained by Zhongshan, is needed by the President of the Federal Republic of Nigeria (Bola Ahmed Tinubu) to travel to a scheduled meeting with President Macron of France.
“As a gesture of goodwill, Zhongshan has lifted the seizure of that aircraft immediately. This will allow it to be used for the President’s trip”. Nigerians would need to soak in this embarrassment of international dimension. A nondescript Chinese firm gloating over doing a favour to Nigeria’s president. This is choking. You will be in order if you feel like throwing up.
How did we get here? And what are the deeper implications of what is currently playing out in the international arena in relation to the game we are playing with the status of Nigeria’s 774 local government areas. But first a rehash of how we got here will help us to understand how Nigeria as a country is setting itself up for future disasters and embarrassments in difficult contracts entered into by the sovereign or its sub-nationals or the 774 councils which are being railroaded now as components of Nigeria’s federating units.
The sequence of events that led to the seizure of the presidential jets started in 2001 when Nigeria and China signed a bilateral investment treaty. Nine years later Zhongshan, through its parent company Zhuhai Zhongfu Industrial Group, acquired rights to develop the Ogun Guangdong Free Trade Zone in Ogun State. In 2011 Zhongshan created Zhongfu International Investment (NIG) FZE to manage the development of the free trade zone. The Chinese subsidiary allegedly built roads, sewerage and power networks within the zone. In 2012, Ogun State appointed Zhongfu as the interim manager of the FTZ. Soon after, a joint venture agreement was signed between the state which reportedly gave Zhongfu majority shareholding and the status of permanent managers of the FTZ. But in 2016 things went awry and the state abruptly terminated the contract, got the Federal Government to revoke the immigration status of the Chinese, and then expelled them.
Zhongshan claimed a breach of the bilateral investment treaty and triggered arbitration proceedings in 2017. Four years later, an arbitration tribunal found in favour of the Chinese, and awarded Zhongshan a total sum of about $70 million. Last year, after a fruitless effort to find an amicable resolution between the Ogun State Government and the Chinese firm, Nigeria sought to use state immunity to shield itself from liability, but it was denied because Nigeria acted out of time. Nigeria lost again on appeal to a higher court in the UK.
Then Zhongshan moved fast to secure charging and interim orders of forfeiture in various jurisdictions including the UK, the US and France, among other places. As in the UK, the US court of appeals for the District of Columbia this year affirmed the enforceability of the arbitration award. So Nigeria is entangled in a web.
But it could get worse in the future given how we are structuring our federation. It could be dismissed as an exaggeration, but what is currently happening to Nigeria through the
tardiness of Ogun State in handling an agreement could be replicated at the local government level with what appears to be our misguided approach to make council areas part of the country’s federating units. Apart from a few sane heads, many Nigerians appear to be giddy about the recent Supreme Court decision on local government autonomy and direct funding from the Federation Account.
Yes, the 1999 constitution as amended may have enabled the ruling of the court. But it needed to be restated that a political solution will be the right thing to do. On councils and other areas, the constitution is riddled with contradictions that should be untangled through clear-eyed amendments. Imagine a scenario where an autonomous council which is flush with money decided on a partnership with a foreign entity to deliver a big ticket project. And along the line something goes wrong, and gets to an arbitration. Then the local government loses, and Nigeria is held liable because of one treaty or the other. What will happen? There could be a case of multiple councils getting into such entanglements. If Ogun State with its legendary embarrassment of riches in human capital appear to have failed woefully in handling a contract divorce, then we can only conjecture what will be the outcome for a local government area.
But we can save ourselves future ridicule by pulling back on this local government autonomy madness now that it is not too late. We have no evidence of anywhere in the world where local government areas are components of federating units. The framework for governance at that
level should be the exclusive preserve of the states in Nigeria. They should create and fund as many councils as suit their fancies. The first step in this regard is to expunge the names of the current 774 local government areas from the constitution. It’s about time we stopped making simple things unnecessarily difficult.
