Court Orders Buhari Govt To Account For $460m Loan Expended On Failed CCTV Project

The Minister of Finance, Zainab Ahmed, in 2019, ignored a request for information on the $460 million and the status of the Abuja CCTV project the money was meant to be used for.

The Federal High Court in Abuja has ordered the government of outgoing President Muhammadu Buhari to “account for the spending of $460 million Chinese loan to fund the failed Abuja Closed-Circuit Television (CCTV) project.”

The court also ordered the government to “publish the total amount of money paid to Chinese and local companies and contractors and specific details of the names of the companies and contractors and status of the implementation of the project.”

The judge, Emeka Nwite, made the order in a judgement on Monday, 15 May, in a Freedom of Information suit filed by the Socio-Economic Rights and Accountability Project (SERAP).

SERAP shared details of the judgement with PREMIUM TIMES in a statement on Sunday.

Loan, failed contract

The CCTV contract was awarded to a Chinese firm in 2010 by the Goodluck Jonathan administration after then Minister of Finance Olusegun Aganga led a delegation to sign a Memorandum of Understanding in Beijing, China.

The project was to be funded from a $600 million financing portfolio secured as a soft credit loan. The loan had interest repayable in 10 years, after an initial ten years of grace, according to a report by Punch.

While the project has failed to materialise, insecurity, which the CCTV project was meant to address, has worsened over the years.

Amidst that, Nigeria continues to service the loan while the Buhari government that inherited the liability refused to provide any information on the project.

“We are servicing the loan, but on the project, we will have to ask the FCT Authority because the project was deployed in the FCTA. I have no information on the status of the CCTV,” the current finance minister, Zainab Ahmed, said while fielding questions from lawmakers during a budget defence hearing at the House of Representatives in October 2019.

She added: “The conditions of the loans that we take from China always will be that a Chinese company will provide infrastructural services. These are loans of 3 per cent (interest rate).”

Suit

Following Ms Ahmed’s failure to provide information on the project status during the legislative hearing, SERAP sent a letter dated 25 October 2019 requesting detailed information about the project.

Its letter, anchored on the provision of the Freedom of Information Act, 2011, asked the minister to provide details, including the amount paid to contractors and which companies concerning the project.

Suspecting that the sum of N1.5 billion, earmarked for the construction of the Code of Conduct Bureau (CCB) headquarters, might be another Chinese loan and could also have been mismanaged or stolen, SERAP also asked the Minister of Finance to clarify it.

The letter was ignored, prompting the organisation to file its suit marked: FHC/ABJ/CS/1447/2019 in 2019 to seek an order of the court compelling the minister to release the information requested.

Defence

In its defence, the minister claimed that SERAP’s letter dated 25 September 2019 was not brought to her attention and that all efforts to trace the letter were futile.

SERAP provided evidence of the delivery of its letter through Universal Parcel Services.

The minister also maintained that she knew nothing about the contract, its award and its execution, adding that the role of her office was limited to the signing of the loan agreement on 20 December 2010 under the broad project of the government’s security communication system.

She said the project was executed by the Ministry of Police Affairs, which, she said, was responsible for negotiating and awarding the contracts for the implementation of the project.

They also said they had no information concerning the contract for the construction of the CCB headquarters.

The Minister of Police Affairs was joined as the second respondent but refused to file any response or send a lawyer to court.

Judgement

Mr Nwite, in his judgement, agreed with SERAP that “there is a reasonable cause of action against the government. Accounting for the spending of the $460 million Chinese loan is in the public’s interest. It will be inimical for the court to refuse SERAP’s application for judicial review of the government’s action.”

“The Minister of Finance is in charge of the finance of the country and cannot by any stretch of the imagination be oblivious of the amount of money paid to the contractors for the Abuja CCTV contract and the money meant for the construction of the headquarters of the Code of Conduct Bureau (CCB),” he added.

The judgement, therefore, ordered the government “to provide the details clarifying whether the sum of N1.5 billion Naira paid for the failed contract meant to construct the headquarters of the Code of Conduct Bureau (CCB) was part of another loan obtained from China.”

“SERAP’s core objectives are to promote human rights, transparency and accountability and anti-corruption in Nigeria.”

“I am of the humble view that there is a reasonable cause of action against the government [through the Minister of Finance], and I so hold that SERAP has made out a case to be entitled to the reliefs sought.”

“The law is well settled that where a document or letter is sent by post, it is the law that same is taken or presumed to have been delivered.”

“Following this principle of law and relying on exhibit OS2, SERAP’s Freedom of Information request sent to Ms Ahmed is deemed to have been delivered. Therefore, the averment by the government [through her] that they were not served with the letter is hereby discountenance. I so hold.”

The court held that the government’s refusal to release the details of the contract to SERAP was a breach of its right to access under section 39 of the Nigerian constitution and the FOI Act.

It also ordered the government to provide SERAP with the information on the total amount of money paid to contractors, with specific details of names of companies and local contractors involved, from the $460 million loan obtained in 2010 from China by the Federal Government of Nigeria to fund the failed Abuja CCTV contract.

Specifically, the court ordered the government to provide the details of the local companies and Chinese contractors that have received funds from the $460 million loan to finance the Abuja CCTV contract and details of the project’s implementation status.

It also ordered the government to provide the details clarifying whether the sum of N1.5 billion Naira mobilisation fee reportedly paid to the contractors for the construction of the Headquarters of the Code of Conduct Bureau in Abuja was part of another loan from China. This is the judgement of the court.

SERAP’s reaction

Reacting to the judgement in a statement on Sunday, SERAP, through its deputy director Kolawole Oluwadare, hailed the judge “for his courage and wisdom,” describing the verdict as “a victory for justice, the rule of law, transparency and accountability.”

The organisation said President Buhari, who has about eight days left in office, has the responsibility “to immediately comply with the court’s orders.”

It urged President Buhari and Abubakar Malami, Attorney-General of the Federation and Minister of Justice, to immediately obey the court orders.”

“The judgment shows the way forward in the fight against corruption and impunity of perpetrators. We will do everything within the law to ensure full compliance by President Buhari with this ground-breaking judgment on Chinese loans.”

“We call on President Buhari to use the judgment as the basis for publishing details of spending of all Chinese loans and other loans obtained by his government since May 2015.”

The organisation recalled that Nigeria’s total borrowing from China climbed from $1.39 billion to $4.29 billion between June 2015 and December 2022, citing data from Debt Management Office (DMO).

Nigeria’s 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) revealed earlier in the year that the federal government would spend N6.31 trillion on debt servicing in 2023, which amounts to about 74.6% of the government’s projected revenue of 8.46 trillion for the year.

Nigeria risks losing vital national assets to China if it defaults in paying back loans obtained from China.

According to a report, Nigeria may have defaulted on Chinese loan repayment and stands the risk of paying a penalty amounting to N41.31 billion. The report quoted the Debt Management Office (DMO), which said Nigeria has failed to fully service its debt to China, which has accumulated to N110.31 billion in the last two years.

“Transparency in the spending of Chinese loans is good for everyone, as this would help to increase the effectiveness, legitimacy, and contribution of the loans to the development of public goods and services and the general public interests,” SERAP said.

“The information being requested does not come within the purview of the types of information exempted from disclosure under the Act. The Respondent has no legally justifiable reason for refusing to provide SERAP with the information requested.”

“Democracy cannot flourish if governments operate in secrecy. The citizens are entitled to know how the commonwealth is being utilised, managed and administered in a democratic setting.”

PREMIUM TIMES