A full-blown media and Twitter hysteria erupted on Wednesday in Nigeria over reports that a member of the House of Representatives discovered a clause in a Chinese loan contract that supposedly puts the country’s sovereignty at risk in the event of default.
The contract in question was a 2018 loan for $400 million from the China Exim Bank to build Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase II Project.
Here’s the clause in question:
“The Borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.”
It’s the word “sovereign” that has everyone so upset. Nigerian media outlets ran with the story and, not surprisingly, the meme that China will seize the country’s national strategic assets quickly went viral on social media:
- ThisDay: House Uncovers Clauses Conceding Nigeria’s Sovereignty to China
- International Centre for Investigative Reporting (Nigeria): House of Reps says ministries signing off Nigeria’s sovereignty in Chinese loan agreements
- Daily Trust: Loans: China can seize assets if Nigeria defaults – Amaechi
Much of the reporting seemed to lack any fact-checking and failed to include analysis from a legal expert who understands what the language in these clauses actually means. On Twitter, a few individuals valiantly tried to push back against the narrative that this clause was evidence of a Chinese plan to seize Nigerian assets:
“There is nothing in that clause that cedes sovereignty to China,” replied journalist Dapo Okubanjo to one of the countless posts on the issue. “Total loan from China is $3bn by the way and is not even beyond the country’s capacity to pay. It is a guarantee against Nigeria citing sovereignty to escape arbitration in case of default,” he explained.
The issue is not going to go away anytime soon, seeing that the ministers of transportation, finance and communication have all been called to testify before the House.
Neither the Federal government nor the Chinese embassy in Abuja has commented on the story.
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