Chinese debt trap policy is making Nigeria 'lose' sovereignty?

In the wake of the economic downturn provoked by the COVID-19 pandemic, criticism of the China-led international development efforts in Africa has accelerated, prompting a review of the conditions under which China provides aid to the development of African infrastructure and economies, reports The Diplomat.

Speaking on Nigeria, the newspaper reported that a clause in a commercial loan agreement signed on September 5, 2018 between the Federal Ministry of Finance and the Export-Import Bank of China for the Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase II Project caught public attention when it was examined by Nigerian lawmakers.

[T]he Borrower [i.e., the state of Nigeria] hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself and 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, the clause states.

Any assessment of the legal impact of a contractual clause requires a thorough reading of its precise terms. Legal language matters a great deal, and professional lawyers dedicate substantial effort to the careful drafting of contract provisions that reflect the exact balance and intention of the parties, The Diplomat reported.

In this instance, it is important to note that the exact contractual terms are that the Nigerian side agrees “to irrevocably waive immunity on the grounds of sovereign or otherwise” (emphasis added), not “waive sovereignty", the newspaper reported.

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