The African Democratic Congress (ADC) has raised concerns over the £746 million agreement between Nigeria and the United Kingdom (UK).
On Thursday, Nigeria and the UK sealed the export finance
deal to support the redevelopment of two major ports in Lagos.
The agreement was announced during a meeting between Prime
Minister Keir Starmer and President Bola Tinubu at Downing Street in London.
Signing the agreement on behalf of Nigeria, Wale Edun,
minister of finance, said the deals are consistent with Nigeria’s priority on
infrastructure, energy, and industrial development.
The minister noted that the increasing emphasis on bilateral
partnerships would help attract the scale of investment required to boost
economic activity, create jobs, and reduce poverty, in line with the
administration’s renewed hope agenda.
Under the deal, UK export finance (UKEF) is expected to
guarantee loans for the refurbishment of the Apapa and Tin Can Island port
complexes.
However, British Steel will supply 120,000 tonnes of steel
for the port projects under a contract valued at £70 million.
Reacting to the £746 million agreement in a statement on
Sunday, Bolaji Abdullahi, ADC national publicity secretary, said the party
“views the deal as disproportionately skewed in favour of the UK, which already
enjoys a significant balance of trade advantage over Nigeria”.
“Although the APC government has tried to hoodwink Nigerians
by portraying the agreement to rehabilitate the Tin Can and Apapa Ports in
Lagos as a diplomatic success, it is, in reality, a commercial loan arrangement
with conditionalities that ensure that a substantial portion of the funds
either remains within the United Kingdom or is repatriated back to it,” the
statement reads.
Abdullahi said based on information available on the UK
government website, which described the deal as a “major vote of confidence in
UK manufacturing”, the £746 million agreement will be delivered through UK
export finance’s (UKEF) buyer credit facility and arranged by Citibank, N.A.,
London branch.
“UKEF is the UK Government’s export credit agency. Its Buyer
Credit Facility enables foreign buyers to access financing from commercial
banks to procure UK goods and services, typically for projects that require
significant UK content participation,” he said.
“In simple terms, UKEF guarantees a loan obtained by a
foreign buyer from a commercial bank, which is then used to pay for UK goods
and services, with the bank paying the UK exporter directly on behalf of the
buyer.”
According to him, under the agreement, at least £236 million
of the £746 million in supplier contracts will be awarded to British companies,
while British Steel will supply 120,000 tonnes of steel billets under a £70
million contract, representing its largest UKEF-backed export order, for port
rehabilitation projects.
Abdullahi said the ADC is particularly concerned that the
federal government has entered into an agreement that leaves the country at “a
clear disadvantage, seemingly in exchange for a few hours of pomp and
pageantry, and as part of a broader attempt to secure foreign validation, even
as millions of Nigerians continue to face poverty, unemployment, and worsening
insecurity”.
He stressed that there are still several unanswered
questions regarding the agreement.
“What are the repayment terms of the commercial loan,
including its duration and applicable interest rate?” the ADC spokesperson
asked.
“What percentage of local goods, services, and
subcontracting is involved in the port rehabilitation project? How many direct
and indirect jobs will be created for Nigerians?
“What is the project timeline, and when will the ports
become fully operational? What provisions exist for training, apprenticeships,
and skills transfer?
“Finally, what are the limits on expatriate staff, and are
there defined quotas for SMEs and community benefit obligations?”
He said if the All Progressives Congress (APC) government
has answers to these questions, it should make them available to Nigerians.
“Otherwise, Nigerians are justified in concluding that, 66
years after independence, President Bola Tinubu has travelled to London to sign
an agreement that resembles a colonial-era treaty, one that risks mortgaging
the country’s future for limited value and symbolism,” he added.
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