Nigeria’s Economy Could Be Severed With British Court Ruling

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London, United Kingdom – Mediaage NG News – If a British court rules against Nigeria, a former civil servant from the West African nation could receive a portion of an enormous sum of damages in a landmark case centred on a multi-billion dollar gas deal.

Former head lawyer of the Nigerian Ministry of Petroleum, Grace Taiga hopes to benefit from the record-breaking $11.4bn awarded to the offshore company, Process & Industrial Developments (P&ID) before England’s High Court.

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According to Al Jazeera , court filings and testimonies show that Taiga is one of three Nigerians who stand to make money if the British court orders Nigeria to pay the award. If so, this could severely damage the country’s economy.

The other two are the businessmen Adetunji Adebayo and Mohammed Kuchazi.Grace Taiga, who received money from P&ID before the signing, is one of three Nigerians who will get a share of the landmark award if the court orders Nigeria to pay.

In January 2017, a London-based arbitration panel ruled that Nigeria pay $6.6bn to P&ID as compensation for breaching the contract awarded in 2010. That amount has since ballooned to $11.4bn with interest.

But, Nigeria has refused to pay, claiming P&ID bribed officials including Taiga to secure the gas contract.In an eight-week trial that ended in March this year, the government petitioned the High Court to invalidate the arbitration award.

The court’s decision is expected within weeks.Analysts say if Nigeria is ordered to pay the damages, its economy could be severely damaged.

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“The negative shock would be monumental,” Olusegun Vincent, associate professor of finance at Pan-Atlantic University in Lagos State, told Al Jazeera.

“It may take us back to the pre-1999 military era, when Nigeria wasn’t creditworthy,” he said, pointing to the risk that the government would be unable to pay its debt.

‘The P&ID scam’

This scandal began in the late 2000s when the administration of then-President Umaru Musa Yar’Adua planned to address Nigeria’s energy supply crisis by exploiting vast untapped gas reserves in its mineral-rich Niger Delta region.

Seizing the opportunity, P&ID pitched an ambitious project to the petroleum ministry, to build and operate a gas-processing plant near the southern city of Calabar despite having never undertaken a project like that before.

Taiga was at the centre of negotiations: She worked on the contract wording, recommended to the late Rilwanu Lukman, the petroleum minister then, that he sign a memorandum of understanding with P&ID in 2009, and witnessed his signing of the gas contract the following year.

Under the terms of the agreement, the government would provide wet gas to P&ID for free over 20 years. The two parties would then split the processed resource, with the government using its share to help power the country’s energy grid.

But, the project never got off the ground. P&ID never built the plant and Nigeria never provided the company with any gas. P&ID blamed the government for the failure and convinced an arbitration panel it had been wronged.The panel awarded the company damages equivalent to the total hypothetical profit the company would have made over the lifespan of the contract – $ 6.6bn plus interest of $1.3m per day from the time the contract was breached.

Evidence later emerged that Taiga had received close to $10,000 from individuals and companies linked to P&ID ahead of the contract signing.

Before the High Court, Taiga acknowledged having received money but said that these payments were merely gifts from a family friend, P&ID co-founder Michael Quinn.

P&ID said it had done everything in its power to make the project work. However, its inexperience and Taiga’s receipt of undisclosed funds eventually led the Nigerian government to believe that it had been the victim of an elaborate fraud.

Addressing the United Nations General Assembly in 2019, then-President Muhammadu Buhari vowed to confront “the P&ID scam”, which he said was “attempting to cheat Nigeria of billions of dollars”.

Anticorruption campaigners seem to agree with him.

“The story of how a small offshore company with no meaningful track record, no website, and only a handful of employees managed to win a multibillion-dollar gas contract raises red flags for corruption that call for careful scrutiny,” Helen Taylor, senior legal researcher at the British NGO Spotlight on Corruption, told Al Jazeera.

The High Court will adjudicate these points. If Nigeria loses the case, the country would be legally bound to pay P&ID what amounts to eight times its 2023 federal health budget.

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