The Infamous Sovereignty Clause and Incidental Matters

Africa as a continent, bled from slavery for 14 centuries: ten to the Arab World,

and another four to the Western World.

Colonial Nigeria was the era in the History of Nigeria when the region of West Africa was ruled by Great Britain from the mid-nineteenth century until 1960, when Nigeria achieved independence.

As a nation that has lived with and through slavery and colonisation for years on end, Sovereignty is a big deal and is cherished. Even if all things go wrong, once the sovereignty is intact, then we're good to go.

WHAT IS SOVEREIGNTY?

Sovereignty is the full right and power of a governing body over itself, without any interference from outside sources or bodies.

Sovereignty is a term that is used to refer to the independence and autonomy of modern nation states. Unlike earlier eras where countries were ruled by Kings in historic times and by colonial powers in the 18th and 19th centuries, ​sovereignty refers to the fact of absolute independence and autonomy that nation states have with respect to the decisions taken by them in matters concerning their citizenry.

Sovereignty means that nation states are free to decide for themselves about the kind of democracy that they want, the kind of rulers that they want, and their policies internally and externally. Often, the concept of ​sovereignty is invoked to delineate the distinction between taking decisions on their own by nation states and resisting external pressures to sway the decision-making process. In this respect, sovereign nations are expected to be autonomous and independent when they pursue policies that are in their interest and their people’s interest and not according to the dictates of a foreign power.

THE SOVEREIGNTY CLAUSE IN THE CONSTITUTION:

Chapter 2, ​Section 14(1)​

(1) The federal Republic of Nigeria shall be a state based on the principles of democracy

and social justice.

(2) It is hereby, accordingly, declared that:

(a): sovereignty belongs to the people of Nigeria from whom government through this constitution derives all its powers and authority;

(b): the security and welfare of the people shall be the primary purpose of government and;

(C: the participation of the people in their government shall be ensured in accordance with the provisions of this constitution.

THE ISSUE:

A full-blown media and Twitter hysteria erupted 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,

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.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.

Rotimi Amaechi, the Minister for Transportation made clarifications while answering questions about the loan controversy on a TV programme, Amaechi, explained that the clause ‘waiving sovereignty’ in the loan agreement between Nigeria and China is only a contract term, a sovereign guarantee that assures payback according to the terms and conditions of any loan.

The waiving of immunity simply means in trade parlance that I’m not giving you this loan free. Just like if you go to take a loan from the bank, the moment you don’t pay, they go after the assets you put down. And people are politicising it. The Chinese can never come and take over Aso rock and become President or Minister.

In the event of a default, Amaechi stated that the lender can only go after, and take back the same assets built with the loaned funds. ​“And if the assets you put down become depreciated, then you negotiate which assets they can go after. The Chinese will never take over what was not constructed with the loan.”

There is no contract without an agreement and that agreement must contain some terms and one of the terms that this one contains, is not that you’re signing away the sovereignty of the country. What you do is, you give a sovereign guarantee.

What Nigerians think:

Nigerians think it's all a sham and that the federal government has indeed sold us to the Chinese as slaves, an exchange for the loan, and that Zambia is a good example because of how things are with them.

The actual fact:

I read ​Article 8(1) of the loan conditionalities that has been latched on to as the offending ingredient, I could not find any reasonable meaning in the obfuscated interpretation. The clause described the loan as ​COMMERCIAL​. That is a loud qualification in public international law.There is no stretch of interpretation of this clause that connotes Nigeria losing her sovereignty to China.

What it simply means is that if the borrower defaults in repaying, and the lender takes the borrower to arbitration to decide how the loan would be recovered, the borrower can’t plead it is a sovereign state and won't subject to the jurisdiction of the arbitral panel.

Even a lay man would ask of the possibility of a country being stripped of its sovereign immunity endowment. It is an impossibility. Simply put, waiver of a state's sovereignty immunity means losing its statehood.

Basically, it is safe to say that the social media interpreted the clause wrongly, and we are also being paranoid for nothing. Our sovereignty hasn't been waived in the literal sense. It means that;

“​Now, when you say ‘I give you a sovereign guarantee and I waive that immunity clause, the immunity clause is that, if tomorrow I’m not able to pay you and you come to collect the items that we’ve agreed upon, that these are items I have put down as guarantee, I can waive my immunity and say no, you cannot touch our assets, we are a sovereign country. They (the Chinese) are saying, if you are not able to pay, don’t stop us from taking back those items that will help us recover our funds”

And it’s a standard clause, whether it’s with America you signed it or with Britain or any country, because they want to know they can recover their money. What the clause does is to say to you, I expect you to pay according to those terms and conditions. If you don’t pay, don’t waive your immunity on me (the lender) when I come to collect back what is the guarantee you put forward.

SUMMARY:

Our sovereignty as a Nation is still Intact. The clause in the contract has been misinterpreted by the media, but Amaechi clarified the facts. Also, if a legal expert looks into the contract, it would be realised that indeed, our sovereignty hasn't been sold to the Chinese and we're still very much in control of our territory.

CONCLUSION:

Sovereignty for many Nigeria has come at the expense of countless lives and sacrifices and hence, it is incumbent upon the successive generations to uphold the sovereign principles of freedom, equality, and choice and not to squander away the good work done by the freedom fighters.

Therefore, our assumptions and jump to conclusion on the sovereignty clause matter means there's a total lack of trust in the government.

We should try to get facts straight before pointing fingers.

REFERENCES AND FURTHER READINGS:

● Editors of Encyclopedia Britannica: sovereignty.

● Nwaze, C (2014): A short history of the slave trade in Nigeria.

● Premium Times, (August 8, 2020): Nigeria's sovereignty and Chinese loans.

● The 1999 constitution of the Federal Republic of Nigeria, Chapter 2(the

government and the people), section 14 (1), (2)(a)(b)(c).

● Olander, E (July 30, 2020): uproar in Nigeria over fears that Chinese loans are jeopardising sovereignty.