President Muhammadu Buhari has, through a letter of request read at plenary by Senate President Ahmad Lawan sought the Senate to approve a request to pay the total sum of about $800 million as judgment debt through the issuance of promissory notes. The $800 million is composed of $566,754,584.31, £98,526,012.00 and N226 billion owed by the Federal government through court judgments brought against them through its MDA’s and Ministries. Social Action condemns this obnoxious request and advises that the Nigerian Senate should exercise caution and refuse consent to such a request, while also criticizing the recurrent breach of contractual terms by government officials that result in judgment debts.
Nigeria’s political landscape has long been marred by issues of corruption and mismanagement, particularly concerning the government’s handling of contractual obligations. Contractual disputes, breaches of legal obligations, human rights violations, regulatory disputes and land and property disputes are some of the cases that are brought against the government through its agencies and ministries. These disputes arise from various sectors such as infrastructure projects, public-private partnerships, oil exploration activities or service agreements. When contractual terms are breached or there are disagreements regarding payment or performance, legal actions are initiated against the government, resulting in judgment debts. Reports have shown that the government often show a lack of interest in most of these cases or failed to settle these disputes through the windows of arbitration opened to them. In some cases, their solicitors don’t even bother to show up in court until a verdict is reached against them.
Although a detailed breakdown of the cases that constitute the debt is not yet available, we will not forget in a hurry the P&ID gas supply and processing agreement with the Nigerian government in 2010 which collapsed, leading to legal proceedings. In 2017, an arbitration tribunal awarded P&ID $6.6 billion in damages, ruling in favour of the company. The judgment debt was later upheld by courts in both Nigeria and the United Kingdom. The Nigerian Federal Government has faced several notable instances where it has been required to make financial payments as a result of court judgments.
Preserving Fiscal Responsibility
Approving an $800 million promissory note so close to the end of an administration poses significant fiscal risks. With only five days remaining, the Senate must prioritize the prudent management of public funds over potentially hasty decisions. Such a substantial financial commitment demands thorough scrutiny to safeguard the nation’s economic stability and protect the interests of its citizens. By refusing to consent to the president’s request, the Senate would send a strong message that breaches of contractual agreements by government representatives are unacceptable. This move would emphasize the need for accountability, transparency, and adherence to contractual obligations.
Promoting International Reputation
The Nigerian government’s commitment to honouring contractual obligations plays a significant role in shaping the country’s international reputation. Repeated breaches of contracts and subsequent judgment debts harm Nigeria’s credibility in the global market, deterring foreign investors and undermining economic growth.
Appropriate Sanctions and Retributive Measures Against Erring Government Agents
Government officials entrusted with handling contractual obligations on behalf of the Nigerian government must be held accountable for their actions. When these officials fail to exercise due diligence in fulfilling their responsibilities, resulting in breaches that lead to an increase in judgment debts, sanctions should be imposed. Such sanctions are crucial for several reasons.
Firstly, holding officials accountable for their negligence or misconduct in contractual matters sends a strong message about the importance of responsible governance. It emphasizes that government representatives must act with the highest level of diligence and integrity when entering into agreements on behalf of the nation. Sanctions act as a deterrent, discouraging officials from engaging in actions that may result in financial losses for the government and its citizens.
Secondly, imposing sanctions for breach of contractual obligations promotes a culture of responsibility and professionalism within the government. It encourages officials to prioritize the careful review and execution of contracts, ensuring that all terms and conditions are met. By enforcing accountability, the government can minimize the occurrence of judgment debts and safeguard public funds from unnecessary financial burdens.
The Nigerian Senate holds a crucial role in ensuring fiscal responsibility, transparent governance, and fair treatment for all citizens. Refusing to consent to the president’s last-minute request to approve an $800 million promissory note is a prudent decision that demonstrates a commitment to upholding the rule of law and addressing the systemic issues that contribute to the breach of contractual terms. By doing so, the Senate can initiate a much-needed dialogue on contract management and implement reforms to prevent future judgment debts. It is essential for Nigeria to cultivate an environment that values accountability, transparency, and the fair treatment of all contractual agreements to foster economic growth and restore confidence in the government’s integrity.
Similarly, implementing sanctions for government officials who fail to exercise due diligence in handling contractual obligations is crucial to uphold the principles of good governance and protect the interests of the Nigerian people. It serves as a deterrent against negligence, fosters a culture of responsibility, and helps mitigate the financial risks associated with breaches and subsequent judgment debts. By holding officials accountable, the government can enhance transparency, efficiency, and the overall integrity of its contractual processes, ultimately benefiting the nation as a whole.
While it is incumbent on the Federal government to live up to its responsibility of meeting up with the court judgement, the incoming government should be allowed to take such critical decisions. This would allow the incoming government time to critically look at the judgement on a case basis to weigh the possibility of appealing any of the judgement with a strong potential of legal reversal. A thorough audit should also be carried out to make sure that the figures are not padded up with fictitious claims. A strong negotiation team could still be put up to discuss with the claimants for renegotiation of the terms, tenors and modes of payment of the debts. It is also crucial to assess the circumstances surrounding the judgment debt and determine if it is justified. The Nigerian government must address the recurrent issue of officials breaching contractual terms, leading to costly legal disputes and judgment debts. Nigeria’s citizens deserve a government that treats all contractual agreements with seriousness, fairness and equity.
The government should embark on a sensitisation drive for the agencies responsible for law enforcement to be professional, and civil and have respect for the rights of the people to minimise judgement obtained against them for the violation of rights. Some of the monetary compensation involve reward to individuals or communities for damages suffered due to unlawful actions, including unlawful arrests, excessive use of force, or infringement of constitutional rights.