Nigeria Waived Sovereign Immunity in Telecom Loan from China, Says Assembly Committee

On July 30, 2020, it was report­ed that a com­mit­tee estab­lished by the Niger­ian House of Rep­re­sen­ta­tives to inves­ti­gate the country’s expo­sure to Chi­nese debt had dis­cov­ered that a $400 mil­lion loan pro­vid­ed by the Export-Import Bank of Chi­na in 2018 for a telecom­mu­ni­ca­tions infra­struc­ture project includ­ed a clause under which Nige­ria waived sov­er­eign immu­ni­ty from the enforce­ment of any future arbi­tral award.  The clause rais­es con­cerns about Nige­ri­a’s abil­i­ty to inter­vene if Chi­na were to seek con­trol of the under­ly­ing assets in a default sce­nario.

Despite these rev­e­la­tions, Niger­ian Trans­port Min­is­ter Roti­mi Amaechi said that a sep­a­rate probe into Chi­nese financ­ing of Nigeria’s rail­way devel­op­ment should be post­poned until Decem­ber and expressed con­cern that the inves­ti­ga­tions could make it dif­fi­cult for Nige­ria to access inter­na­tion­al project financ­ing.

The inves­ti­ga­tion is the result of a motion passed by Nigeria’s House of Rep­re­sen­ta­tives on May 12, 2020, which estab­lished the com­mit­tee.  Part of the committee’s man­date was to explore the pos­si­bil­i­ty of apply­ing force majeure rules to its loans from Chi­na, which could allow for some loans to be can­celled.  The motion came amidst dis­con­tent among Niger­ian law­mak­ers over the non-trans­paren­cy of Chi­nese loans and grow­ing calls for Chi­nese devel­op­ment lenders to pro­vide debt relief as the COVID-19 pan­dem­ic rais­es repay­ment dif­fi­cul­ties.  

The Export-Import Bank of Chi­na is Nigeria’s largest bilat­er­al cred­i­tor, accord­ing to Rep­re­sen­ta­tive Ben Igbak­pa, who ini­ti­at­ed the motion.  Recent esti­mates sug­gest that there are at least 17 Chi­nese loans to fund var­i­ous projects in the coun­try.