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By Nosike Ogbuenyi
Poverty has become an undisputed overwhelming major socioeconomic problem in most countries, especially the developing ones.
Jim Wolfensohn (full names James David Wolfensohn), President of the World Bank from 1995 to 2003 had some qualities in common with Nigeria’s Ned Munir Nwoko – courage and vision. By the year 1995 when Wolfensohn assumed office as the global bank’s Chief Executive, corruption was festering in most of the world’s mega development institutions and he took courageous measures against the malaise.
President Olusegun Obasanjo administration’s tough stance against corruption rhymed with Wolfensohn’s anti-corruption policy at the World Bank. It was during Wolfensohn’s visit to Nigeria in the early 2000s that he made a statement that was capitalized upon by Hon Ned Nwoko, then a serving member of Nigeria’s House of Representatives to commence the long drawn struggle that culminated in the liberation of Nigeria from the perennial external debts overhang associated with the London-Paris Clubs of creditors.
The Australian-American World Bank President announced Nigeria’s foreign debt figures which did not tally with the statistics given by Nigerian officials at the time. The differentials might have been waved aside as an innocuous statistical mix up but the incident was enough signal for a concerned Ned Nwoko to plunge into the matter and unravel the true position of things.
As a matter of fact, Ned Nwoko had helped some other countries such as Morocco, Ghana, Mali and Senegal to unravel the facts about their foreign loans. He had counseled them on safer ways of sourcing, negotiating and superintending the loans as well as strategies for detecting and evading asphyxiating debt traps.
Concerned about the discrepancy in Nigeria’s foggy debt figures, Ned Nwoko approached President Obasanjo in 2002 and intimated him about his debt investigation experience in other countries and preparedness to launch a probe to uncover the correct structure of Nigeria’s external debt profile. President Obasanjo gave his nod for him to proceed with the big task and it did not take long before he began to achieve results.
The President set up a committee with members drawn from the Revenue Mobilization, Allocation and Fiscal Commission, Ministries of Justice and Finance, Accountant-General of the Federation, Central Bank of Nigeria (CBN) and some states to engage with Ned Nwoko solicitors. The findings of the committee were that Ned Nwoko’s findings were correct and that the states had over paid and that there would be refunds.
Prior to and during his tenure as a member of National Assembly, Ned Nwoko had gathered ample information and data on gaps in the superintendence of Nigeria’s foreign loans especially the manner they were sourced, negotiated and signed. Armed with the evidence he gathered from government officials at various levels and other sources together with what he already had from Europe and America, the relentless international attorney, launched a massive inquest backed by multi-pronged legal slugfests at the global stage. He certainly knew more than most Nigerians about the inadequacies and rots in the world’s large development institutions and finance agencies.
Armed with evidence from both home and abroad, he wasted no time in embarking on a long drawn and tortuous inquest to unravel the innermost truth about Nigeria’s debt profile abroad. Through Ned Nwoko Associates and Linas International Limited, he filled multiple legal proceedings, between 2003 and 2010 in different countries where the headquarters of the mega development institutions and finance agencies as well as the big international lending banks are located. These include London, Paris, Geneva (Switzerland), Abuja and other places. In London alone, ten suits were filed by Ned Nwoko as he fought from all corners. His principal clients through class actions were Nigeria’s 36 states and 774 local government areas (LGAs) which were the primary victims of over deductions in the guise of repaying and servicing accumulated foreign loans.
Initially officials in some relevant Ministries were concerned about his idea of litigation. They were worried that the move might offend the powerful lending nations and their equally powerful finance cartels like the Paris and London creditor clubs. Some officials were apprehensive based on their calculation that such actions might either expose their corrupt deals or block their sources of self-enrichment.
But Ned Nwoko was unfazed about all those. He is not known to be a man that would be easily dissuaded by emotions or sentiments on such critical issues that impinges on his home country’s survival and development. He was poised for any eventuality on the way of liberating Nigeria from the excruciating weight of over-bloated debt burden.
Once the legal battle got under way after he filed the first suit in London on behalf of Nigerian states and local governments, he advised the Federal Government to stop making further deductions from the states and requested for the process of refunds to the states and local governments to commence. That was how the refunds began during the Obasanjo era with Adamawa and Taraba states in 2003. Other states followed by engaging Ned Nwoko solicitors and refunds were then made in piecemeal.
For several years dating back to 2003, Ned Nwoko, at grave personal risks and costs pursued and fought the powerful creditor organizations (London/Paris Clubs). His findings revealed that in almost all the cases, the amount of the actual loans taken had ballooned due to multiplicity of tangential costs and factors such as penalties, rescheduling, handling and sundry bank charges. He spent colossal sums on mobilization, filling, processes, court appearances and others. Aside the regular legal expenditures, he assembled auditing and forensic teams at both international and local levels.
All the state governors signed authorities mandating Ministry of Finance to deduct the consultancy fees from their total refunds for the consultancy fees. And the states and the local government were all happy and satisfied with that at that time when the cake had not been baked. Various states individually signed agreements with him to represent them. The deals were signed between 2003 and 2012 with Adamawa, Taraba, Anambra, Ondo, Ebonyi, Imo, Niger, Bayelsa, Kogi, Abia and Edo among others before all the states entered into a class agreement with him under the NGF.
Notwithstanding the agreements they had already entered with Ned Nwoko on consultancy, they began to engage more consultants and even contractors ostensibly with the ultimate aim of taking a cut from the ‘windfall’.
The efforts and success of Ned Nwoko opened the eyes of many people particularly Nigerians that any person or lawful company can bring a legal action against a contractor or organization who were found to have acted corruptly even with regard to external loans or debt management.
Following a suggestion made to President Obasanjo by Ned Nwoko on the need to establish a government agency through which the issue of management of local and foreign debts could be mainstreamed and handled professionally and diligently, the Debt Management Office (DMO) was established.
A staggering $13 billion was recovered for the states and local governments as refunds through the efforts of Ned Nwoko and some others who only joined him later along the way. Of this amount over $3 billion accrued to the local governments while $10 billion went to the 36 states based on varied proportions. Between 2016 and this 2021, the states and local governments received the full refunds secured for them. They received the amounts based on the understanding that they have warehoused the consultancy fees which ordinarily ought to have been deducted at source.
Another positive fall out of the battle was the writing off of $18 billion of Nigeria’s debts owed the London-Paris club and the buyback deal which cleared the outstanding $12 billion. With that, Nigeria exited the club’s debt overhang.
In making their argument against the payment of the approved part payment of $418m to the consultants, the NGF strives to downplay the fact that several consultants are involved and that there were many consent agreements. For instance, a letter of no objection for payment of legal/consultancy fees to Linas International Limited regarding over-deductions on Paris and London Club loans on the accounts of states and local governments, was signed on July 5, 2017 by the then Chairman of the NGF and Dr Fayemi’s predecessor, Governor Abdulaziz Yari Abubakar of Zamfara State. This is just one of several class agreements that commit the NGF and ALGON to payment of the consultants. Is it lawful for the states and local governments to make a u-turn midway on the deals they willingly signed with the consultants after collecting billions of dollars worth of refunds facilitated by them? The answer is No.
And who is to blame for the duplication of consultants? The NGF is solely culpable. Once it became clear that Ned Nwoko was set for a resounding success in the London-Paris Clubs refund battle, the NGF and the ALGON changed their dance steps. To the utter disbelief of the lone fighter, Ned Nwoko, they began to introduce or smuggle in additional consultants and contractors over a matter that was already being effectively handled by Ned Nwoko Associates and Linas International for over a decade. to share in what they wrongly perceived as free gift.
The appointment of fresh consultants and contractors by both the NGF and the ALGON after Ned Nwoko had won the case or when it became obvious that he would triumph was what escalated the cost of the services. The Federal Government knows the truth about the matter.
The President knows it is not an issue of corruption on the part of the consultants but bad faith aimed at barricading payments with documentary and judicial backings.
In clear contravention of the agreements, the governors through the NGF which collected two tranches of the refunds and annexed the whole money without setting aside the percentage which accrued to the consultants. Rather than honour the deals, the NGF convinced the President to direct the Economic and Financial Crimes Commission (EFCC) to investigate the consultants. For instance, the EFCC investigated Ned Nwoko and his firms thrice, but the anti-graft body on all three different occasions found nothing incriminating against them. Of all the consultants, Ned Nwoko and his Linas International Limited come clean of underhand dealings.
Ned Nwoko and other consultants went to court and came out victorious with consent judgments. Again to pay in accordance with the judgments and presidential approvals the same NGF is failing to keep faith with agreements and rather scouting for excuses including call for a forensic auditing and another round of EFCC inquest.
It is incongruous for the NGF to file an action through their lawyer a month ago seeking to set aside the same judgments that they fully benefited from. Based on that action, are they prepared to return the $13b refunds already received by them and which attracts the consultancy fees? It is either that they are ignorant of the laws of Nigeria or they are being not only malicious but dishonest. How do they hope to set aside a 2013 judgment that has been fully implemented?
Also, the contention that the approved $418million is humungous and unbearable loses weight when juxtaposed with the sum of $13billion recovered and reaped by the beneficiaries together with the $18b earlier written off. This hindsight, together with the binding agreements, probably explains why the Federal Government, which knows more about the matter, has demonstrated clear commitment to making the payments in order to avoid embarrassing judgment enforcements especially abroad.
The Federal Government in approving the US$418million payment to the four consultants came out with a staggered payment arrangement which spreads the deductions over a period of ten years. The consultants’ acceptance to be paid in piecemeal and by promissory notes is indeed a huge sacrifice because over the long period of ten years they would likely lose almost 50% of the value. On the other hand, if they had conceded and insisted on quicker discounting without waiting for maturity in ten years, they would have had better value.
The Federal Government is sincerely desirous to have the matter of the payment resolved to avoid further embarrassments through enforcement of garnishee orders by the consultants.
As a matter of fact, enforcement actions have already been carried out against the Federal Government in various cases through garnishee orders absolute made against the Central Bank of Nigeria (CBN) attaching Federal Government funds.
Under the prevailing situation, the Federal Government is bearing liability over the actions of NGF and ALGON in not paying the consultants when they reaped the refunds. Yet the consultants were lawfully engaged by them. It smacks of selfishness for the NGF to be resisting efforts to defray the liability incurred by them without providing any buffer or safety net for the Federal Government. And should the Federal Government accede to the request of the governors by not implementing the payment, the implication is that the judgment creditors (consultants) will continue to threaten or take actual steps against the assets and funds of the Federal Government and its agencies. Such enforcements would come with the accompanying adverse effects and legal burden that would be suffered by the Federal Government and its officials and not the NGF or ALGON.
It is not enough for the NGF to accuse the consultants and some Federal Government officials of corruption in a bid to demonize them into abandoning the quest for the payment. Honouring the terms of the agreements with them will enhance rather than diminish the anti-corruption stance of the Muhammadu Buhari administration. It will preserve the integrity of the governors as well. There are still many Nigerians who will not fall for the cheap antic of spraying the odium of corruption on persons and companies asking to be paid for agreed lawful services rendered. The President who approved the payment knows it is not an issue of corruption on the part of the consultants per se but bad faith aimed at barricading payments with documentary and judicial backings.
Furthermore, the argument of the NGF that the London-Paris Club refund is a sovereign debt which ought to be predicated on the consent of the 36 state governors plus approvals by the Federal Executive Council (FEC) and the National Assembly (NASS) cannot suffice due to the fact that the states under the NGF have already received payments from the same source since 2016 through 2018 and 2019 amounting to trillions of naira without recourse to FEC and NASS approvals.
Similarly, the indemnity issued by the former NGF Chairman, Governor Abdulaziz Yari of Zamfara State with respect to the consultancy payment was a valid class action which cannot be repudiated by his successor and the incumbent Chairman, Governor Kayode Fayemi of Ekiti State as untenable or antithetical to the best interest of the forum whereas they had collectively received refunds through processes and authorizations by the same former NGF leadership. The law recognizes leadership as a valid continuum.
Also, the consultants whose efforts culminated in the multi-billion dollars London-Paris Club refunds should be paid their fees without grudges. And in factuality, if you risk nothing, you gain nothing. Why begrudge those who staked their lives, resources and careers to stick out their necks and fight for a cause while you recoiled in your comfort zone and thrived in political and social correctness? As the holy books say, a labourer is entitled to his wages.
The NGF and ALGON should better leave sentiments aside and accept the format of payments as structured to be made gradually through deductions. Some persons may not like the faces or names of some of the consultants who are entitled to the payments, but the question that arises is: Did the consultants facilitate the refunds? The answer is yes, simply and squarely.
• Nosike Ogbuenyi, a former Associate Editor of Sun Newspaper contributed this piece from Abuja..
