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Tag: Presidential jets

  • Re: Seizure of Presidential jets

    Re: Seizure of Presidential jets

    Today, I will reflect on the recent Chinese takeover of Nigerian aircrafts in France and Canada as part of the ongoing imbroglio between Ogun State and a Chinese Company Zhongshan Fucheng Industrial Investment Company Limited/ Zhongfu International Investment FXE).  This debacle has become somewhat of an international embarrassment for Nigeria, and I hope that the issue will be addressed as quickly as possible to prevent negative impact on President Bola Ahmed Tinubu’s efforts to bring in Foreign Direct Investments (FDI) as a means of economic recovery and growth.

    In analyzing this topic, I wish to lean on my credentials a strategist, global investment expert, special economic zones expert and, the first substantive MD/CEO of arguably the first airport free trade zone (FTZ) in Nigeria. Additionally, I am also a member of the World Free Trade Zone Organization (WZO), so, we have access to get additional information including for government to take note that the Chinese company is going after other Nigerian assets in other jurisdictions.

    About two months ago, the Honorable Minister of Investment, Trade and Industry, Dr. Doris Nkiruka Uzoka-Anite; during her 1-year performance review, stated that President Bola Ahmed Tinubu had secured over $30Billion Foreign Direct Investments (FDI) commitments within 1 year of his administration. It is worthy of note that the ongoing saga between Nigeria and the Chinese Company will discourage prospective investors to Nigeria and if not properly addressed, could undermine the FDI efforts of President Tinubu’s administration, and also he efforts of the private sector businesses that have secured or are trying to secure foreign investments. The Dangote debacle and this Chinese Company saga will raise questions and red flags by investors and even Countries from a risk perspective. This is will also impact the negotiations positioning of Nigeria and Nigerians when engaging investors due to such actions by governments at subnational or even actions of some government officials at federal level. The risks will be escalated with regard to goodwill, also with regard to the position of Nigeria in global investment trade climates

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    So, my call is that Governments at Federal and especially at State levels should be circumspect when going into international agreements, transactions and other engagements, lest their actions or inactions will put the entire country in serious socio-economic jeopardies with dire consequences. A classic example is this case whereby the actions of a State Government many years ago with a Chinese Company, not even the Chinese Government, has led to the seizure of the assets of the Federal Republic of Nigeria and not even the assets of the State Government. Therefore, it is very important that governments contemplate the domestic and international ramifications of their decisions and act accordingly.

    Another key point to note, is the way we react when such an international incident occurs. He federal government should have a crisis management protocol that will respond to such a situation. For example, when the Chinese Company seized of the aircrafts in France, there were discordant voices by government officials including Ministers which gave the impression that there was no inter-agency collaboration between MDAs at federal level and also between Ogun State Government and Federal Government. I advise that when such incidents occur, there should be a crisis management or “damage control” protocol in place to ensure that there is clearing house with regards to communication. There should be a coordinated response in such ways and manners that Nigeria puts its best foot forward; and a template to ensure that as a government we put a good face out there and speak with a unified position and voice that will give us a better standing in the face of the committees of nations. This is very important in foreign relations as it is in international investment, trade, etc.

    With regards to Free Trade Zones operations and management, I do not know how the former Governor was able to sign-off the license or revoke such a special economic zones project without the input of the Nigeria Export Processing Zones Authority (NEPZA), which is the only government agency that has the powers to manage, administer and discipline Free Trade Zones in Nigeria – with due recourse to the provisions of the NEPZA Act 1992 and the NEPZA Operational Guidelines and regulations. For example, Section 1 sub section 1, of the NEPZA Act gives the authority to assign and declare free trade zones anywhere in Nigeria, only to the President of the Federal Republic of Nigeria. By extension, it is NEPZA (with due recourse to the Honorable Ministry of Investment, Industry and Trade), that can revoke Free Trade Zone licenses based on established processes and procedures. 

    In addition, another very important issue that may have put us in a bad position is the lack of diligent litigation by the lawyers that have been representing Nigeria during the arbitrations at the United Kingdom (UK) and at the United States of America. We are aware that there were 2 instances (or even more) when the arbitration process was ongoing in the UK and USA Nigeria’s lawyers were not in the Court. This sloppiness certainly worsened our case, further placed us in a bad position and certainly impacted the outcome against Nigeria, because this shows lack of seriousness and lack of respect to the arbitration process.

    Indeed, this is a very sad and embarrassing situation that we found ourselves as a Country. In my view, this is another avoidable situation that was created based on what so far looks very much like an avoidable situation. When some of us spoke to a similar issue some years ago, we ran into issues because people do not want to hear the truth and those truths that we were talking about 5 to 6 years ago are manifesting in the case of Ogun State. I seize this opportunity, to call on President Bola Ahmed Tinubu to re-evaluate all our special economic zones agreements where Nigeria (at Federal and State levels) have agreements with international investors, not just the Chinese.

    In the case of this particular issue where a State government’s action has backfired on the assets of the Federal Republic of Nigeria; I listen and before things blew up, some of us have been keenly following the developments for the past 10years, because within the international circle of special economic zones, conversations on thus case have been ongoing. The truth is that we sat on our hands for about 10 when this issue was snowballing into a combustible issue that blew upon on our faces as a nation. The point is that there is a subsisting agreement and what makes this case a bit different, is that it is backed up by an agreement that is leaning on a bilateral agreement between Nigeria and China that was signed-up in 2001; with ProVisors that are germane and worth noting by all stakeholders for compliance. With all due respect to the former Governor of Ogun State, his excellency, Senator Ibikunle Amosun, he confessed to have made a mistake and that mistake in my opinion was avoidable. That singular act is what cost us this international embarrassment whereby the Presidential jets of Nigeria were seized by a Company, not even a Country, and the Company is clamping down on other Nigerian assets globally.

    The argument about two Chinese Companies quarreling about being the authentic Company to be part of the agreement with Ogun State was completely uncalled for. How come we did not undertake due diligence ab initio – before the then Governor Amosun signed off, not just Ogun State assets but the territorial integrity of Nigeria and the assets of the Federal Republic of Nigeria? Due diligence is common-sensical to say the least and that could have most likely, saved us all that is happening now. This kind of behavior, especially by political leaders is becoming a corporate culture in Nigeria. Because there are two layers of engagement, the first thing to do was to go through the details of the agreements between Ogun State and the Chinese Company and also the Bilateral agreement between Nigeria and China. In addition, there should have been critical stakeholders’ engagement.

    With regards to some people that are saying that Federal or State Governments could also revoke agreements with foreign or even local partners, I say to them, “you can’t just “yank off” agreements with foreign partners without properly following due process the rules of engagements”; because doing so would lead to adverse consequences. Just because we get away with doing things anyhow in Nigeria does not mean that we can get away by behaving anyhow in the international arena. Let me remind us that in international agreements and even here in Nigeria that parties to agreements are bound by the agreements. Importantly, we are bound by the rules of engagements. For instance, there is always a “penalty clause and also there is also the “exit clause” provisions in the agreements which if not complied with will lead to consequences of breaches of agreement.

    I do not support the seizure of our national assets, but I believe that part of the problem is that we go into such engagements without any strategy. Anything without strategy will fail. We are dealing with the Chinese or any serious Country that will come to the table with a masterplan and strategy to ensure that they protect their investments, why didn’t we as Nigeria do the same? And if we did what are the safeguards and the leverages, why haven’t we used them to avoid the current logjam?

    I hope that this saga will guide the thinking ad actions of President Bola Ahmed Tinubu, so that a strategy, policies and systems will be out in place to prevent the re-occurrence of such avoidable situations which will certainly hamper development.

  • Beyond the seizure of Nigeria’s presidential jets

    Beyond the seizure of Nigeria’s presidential jets

    • By Mike Kebonkwu

    Many patriots may have been furious that a fleet of Nigeria’s presidential jets was seized in Paris, France over a failed contract between a Chinese Firm, Zhongshang Fucheng and Ogun State government on the orders of French court.  We are not just talking about national carriers but presidential jets which are symbols of our sovereignty. Not one of it but three presidential jets were impounded and sequestrated in satisfaction of debt arising from arbitral award over a breach of contract.  This   national odium and embarrassment raise some pertinent questions which we cannot afford to gloss over; no politics! 

    What was the mission of three presidential jets all at the same time in faraway France? Information coming from government has it that the jets went for routine maintenance.  Three jets, for routine maintenance at the same time! 

    The seizure speaks to the prestige of Nigeria’s diplomatic standing in the comity of nations.  Nigeria no doubt enjoys diplomatic and bilateral relationship with China.  By the action of the French court, Nigeria is stripped completely of its sovereign immunity and statehood under international law and diplomacy.  The Chinese government is certainly complicit in this transaction and including the litigation.  This is because it is a common knowledge that most Chinese corporate outfits are veils for the Chinese government business model. 

    This drama raises issues about the sovereign immunity of a state under international law and the hidden terms of the international finance capital and liability of state parties in commercial transaction in contract.  Why would a country be held responsible for commercial transaction entered into between a foreign company and state government or any other entity without the country’s direct involvement as a party? Where does the immunity of a country lie in the event of failure in contractual obligation that it did not enter into directly as a party with a foreign company or entity? 

    This is a very low point for our foreign relations and reputation as a sovereign nation. This is the bitter lesson that other African countries that go cap in hand to collect all manners of loans from foreign companies and international financial institutions and government should learn.  What is uppermost in the consideration of our so-called foreign partners is always their commercial interest rather than niceties about diplomacy. Our leaders do not care about national integrity, morality and honour whenever they are rushing for foreign loans which they can hardly account for.  Some of the foreign borrowings are used to pay salaries and buy exotic cars and ostentatious living not investment.  When the loans are tied to any project, more often than not, the project is abandoned before the ink dries on the contract paper it is made.  At home, government officials are serial lawbreakers.

     Something just did not add up in this whole drama.  Was Nigeria a state party or privy to the contract between the Chinese Firm and Ogun State government?  Did the Ogun State government pledge Nigeria’s asset abroad as guarantee or collateral for the contract? The act of the Chinese firm and the French Court is an attack on the sovereignty of the Nigerian state capable of eliciting diplomatic row with China and France.  Again, we do not have the appetite for a diplomatic fight with any nation great or small because we are humble supplicant for life-lines from the same Chinese government for all manners of loan as mendicants. 

    This is the reason up till now the Ministry of Foreign Affairs has failed to speak strongly to this national embarrassment by so-called friendly nations.  To one’s chagrin, the president proceeded on a working visit to France.  If it was a scheduled visit, it ought to have been called off or cancelled as a mark of protest; and if the president’s minders did not see this, there is certainly a dereliction of duty on their part which requires not just admonition but sanction. 

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    Whatever the narrative, the incident leading to this action is a pure commercial transaction between a company and a state government and unless the Nigerian state is privy and probably guarantees the loan or offers its assets abroad as collateral; it is despicable to seize Nigeria’s asset abroad in fulfilment of the obligation of a state government.  If the state government in the course of transaction had made Nigeria’s assets abroad collateral, then the matter should be investigated because they ought to have been clearance from the Ministry of Justice and Office of the Attorney General of the Federation and, or the Ministry of Foreign Affairs. When that is not done, the government should proceed immediately to deal with the individuals behind this deal and there should be consequences.

    Almost all the state governments in Nigeria without exception carry portfolio to foreign companies and international lending institutions to borrow or take loan which they can hardly account for leaving the states pale and anaemic.  This is just the beginning of what we are going to experience with many more lending agencies and companies that will be watching for the outcome of this bizarre drama. 

    This also brings one to what the government at different levels have been doing with expatriates and foreign companies operating in Nigeria.  For instance, Chinese companies have taken over virtually every major construction work in the country and the mining industry. Some of them are fronts of government officials deepening the corruption in the system.  They treat Nigerian workers with disdain and nobody cares; in our own country!  These Asians treat the black like sub human apes and we watch it.  Without sounding an alarmist, the Chinese government reticent mute over this incident is such that in no distant future, it will move in any court in foreign land to take over Nigeria over mounting unpaid loans and debt servicing. 

    We depend on expatriates because we do not have confidence in our local experts and fail to invest in human capital development.  We are fighting corruption half-heartedly and refuse to develop our infrastructure.  This is the price we are paying with this national embarrassment. 

    Moving forward, government officials and functionaries should begin to see public office beyond personal estate and respect every lawful contract and obligations entered into as in the Latin phrase in international law; “pacta sunt servanda” (agreement must be kept).  Government functionaries should stop acting like emperors because they occupy public office; they are to act with fidelity at all times.  We should hold public officers accountable for every acts and omissions that affect the State and public image of our country.

    •Kebonkwu Esq, an Abuja-based attorney writes via mikekebonkwu@yahoo.com

  • Presidential jets seizure: NICA mulls use of due diligence experts to screen offshore contracts

    Presidential jets seizure: NICA mulls use of due diligence experts to screen offshore contracts

    The National Institute of Credit Administration has advised different levels of government in the country, as well as other agencies and organisations, to establish the creditworthiness of investors, contractors, and all other participants before signing any offshore contract.

    The chartered professional body responsible for the control, supervision, and regulation of the credit management profession, as well as consulting with and making recommendations to the government,  regulatory bodies, trade associations, and other professional bodies on all matters relating to credit management in Nigeria, advised in a statement reacting to the recent attempts by a Chinese company, Zhongshan Fucheng Industrial Investment Co. Limited, to take over offshore assets of the Federal Government of Nigeria through subterfuge.

    Zhongshan had impounded three of Nigeria’s aircraft in Paris, France, following the order of a French court in a dispute with the Ogun State government.

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    As a statutory body with the legal mandate to assist governments on all matters relating to credit management, the institute stressed the importance of the Federal government taking advantage of the specialism of the gazetted professional bodies in the country in formulating policies relating to not only domestic economic management issues but also international credit and financial bilateral engagements.

    The Registrar/Chief Executive Officer of NICA, Prof Chris Onalo, noted that organisations with good creditworthiness status usually possess the integrity to executive contracts devoid of controversies.

    He also said it is important for the federal government to ensure the inclusion of creditworthiness criteria to be met by any institution, organisation, agency, or state government before standing as a guarantor for them on credit and other commercial matters, among others, as governments no longer operate archaic governance systems.

    The NICA boss also called for a comprehensive overhauling of Nigeria’s economic and financial policies to include due diligence, creditworthiness assessment, and rating, and an assemblage of specialist negotiating teams selected from relevant sectors of experts.

    Onalo, while noting that the nation boasts of an array of talented, competent, and integrity-minded professional institutions and people who can impact the government policies for success, emphasised that a fragile emerging economy such as Nigeria should be looking forward to collaborating with people that are vested with knowledge in specific areas, not just with the people working in government alone.

    “We are calling for an overhauling of our country’s credit and financial policies at the federal level in respect to guaranteeing commercial obligations in favour of any subnational authorities in the country. We are calling on state governments to begin the process of cultivating and building creditworthiness status for themselves. As a statutory professional body with the power to regulate the credit management profession in Nigeria, the institute is here to assist the state government in building their creditworthiness profile.”

  • Presidential jets: Saving Nigeria cost and national embarrassment

    Presidential jets: Saving Nigeria cost and national embarrassment

    • By Ahmadu Danasabe

    Let’s begin to with a piece of history. On Tuesday, April 3, 2001, the Senate approved a sum of N5.5bn for the purchase of a new presidential aircraft for then-President Olusegun Obasanjo. In February of that year, Obasanjo sought the Senate’s approval for $19m as part of monies to purchase eight new aircraft for the Presidential Air Fleet.

    The senate had refused an earlier request by Obasanjo in 2000, but he renewed his request after a technical fault left him stranded in Davos, Switzerland, where he had attended the World Economic Forum.

    Twenty three years later, there is a growing concern over the huge maintenance cost of Nigeria’s presidential aircraft. From news reports, Air Force 001, which serves President Bola Ahmed Tinubu as his official jet gulps billions of naira in maintenance. A senior official familiar with the maintenance of the presidential fleet had told Daily Trust that between the routine maintenance and purchase of parts, the aircraft had been guzzling huge amounts of money. The source said it was not a new trend as that it had been going on for a while, making the erstwhile Presidential Air Fleet Commander to recommend that it should be demobilized.

    Findings revealed that neighbouring countries have fairly newer aircraft compared to Nigeria. For instance, Ivory Coast, apart from having two Gulfstream aircraft in the presidential fleet, also operates A319 and A320 for longer trips. Senegal uses A320Neo and A319 in addition to other smaller jets.

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    It is high time that Nigeria’s Air Force 1, acquired by President Olusegun Obasanjo, 23 years ago is replaced with new one because of the high cost of maintenance. Obviously, as aircraft gets older, it costs more to maintain in order to keep it airworthy and for presidential jet, extra care is taken to sustain its safety status.

    As the aircraft continues to operate under the presidential jet fleet, no doubt, more money will be needed to acquire more spares and more money will be needed to ferry it overseas to conduct higher maintenance checks.

    It was a national embarrassment at international scene, when recently President Tinubu was ferried to an economic summit in Saudi Arabia by a commercial aviation operator after his presidential plane was taken into rehabilitation and a second aircraft he was travelling with developed a technical fault in the Netherlands.

    President Tinubu arrived in The Hague on April 23 for a series of economic and diplomatic engagements at the instance of Prime Minister Mark Rutte. He learnt shortly before he was scheduled to depart the Netherlands on Friday that his plane had suffered unspecified problems. Some of the technical complications included an oxygen leak.

    This forced the president and his delegation to leave behind the Nigerian government aircraft and use a charter jet company to facilitate their onward journey to Saudi Arabia for a special session of the World Economic Forum in Riyadh, arriving on Friday night.

    President Tinubu and some of his personal aides left Rotterdam on a Falcon 8X 9H-GRC private jet for the summit, scheduled for April 28-29. The rest, including several ministers and other high-ranking administration officials, made the trip on separate support aircraft and commercial airlines.

     Also Vice President Kashim Shettima few weeks ago had to abort a US Trip mid-air. He was originally scheduled to represent the president was unable to make the trip following a technical fault with his aircraft, forcing him to make a detour on the advice of the Presidential Air Fleet.

     Over $8 million was reported to have been spent fixing the plane for different vulnerabilities since December 2022 alone. This is a significant amount for a country of 230 million with an unenviable reputation as the world’s poverty capital. Aviation monitors have publicly decried the huge maintenance expenditure as wasteful, prescribing instead that a new plane would serve the country better and renew confidence in air travel safety for future presidents.

    The House of Representatives Committee on National Security and Intelligence has asked the federal government to purchase new aircraft for President Bola Tinubu and Vice-President Kashim Shettima. The committee’s recommendation is contained in a report released after its investigation into the status of the aircraft in the presidential air fleet.

     “The committee is of the strong and informed opinion that it is in the best interest of the country to procure two additional aircraft as recommended,” the report reads.

    “This will also prove to be most cost-efficient in the long run, apart from the added advantage of providing a suitable, comfortable, and safe carrier befitting of the status and responsibilities of the office of the president and vice-president of the Federal Republic of Nigeria.

    The senate also through the Senate President, Godswill Akpabio, said recently that the Presidency had not approached the National Assembly with a request for new presidential jets. He, however, said should such a request be made, the Senate would approve it.

    For his last international outing, the president flew a private jet to South Africa to attend the inauguration of President Cyril Ramaphosa. Whereas President Tinubu and his Vice, Shettima have managed to carry out their official duties despite a pattern of last-minute troubles with presidential planes, administration officials are nonetheless concerned that the frequent glitches, besides being immensely embarrassing for the country, could potentially inflict a catastrophe of historic proportions.

    With apparent danger that the planes are signalling from their frequent breakdowns, it is clear that the planes are old and there should be serious consideration towards their replacement in order to save high maintenance cost which the country cannot afford and the consequent national embarrassment caused by the frequent breakdown of the Nigeria Airforce 1.This is a national emergency that should be accorded urgent and accelerated consideration by the authorities as done to President Obasanjo in 2001.

    • Danasabe wrote in from Abuja.