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Emmanuel Onwubiko: Senator Lawan and Nigeria’s road to serfdom – Daily Post Nigeria

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In a bid to do justice to the above theme, I searched historical information on how nations can sleepwalk into Serfdom from freedom. I then discovered the fact that F.A. Hayek published The Road to Serfdom in 1944 as a response to the Russian communists and the German and Italian fascists of the 1920s, 1930s, and early 1940s, as well as to those in other parts of the West that might be tempted by the allure of a society based on total security or equality.
Hayek was reportedly worried that the impulses for planning and power by the intellectual elite and the desire for security and equality by the people could be ruinous to free societies. He believed that those who argue most for giving the public freedom and security by increasing the power of the state would be the very individuals who would put the public on the road to serfdom. It is impossible for a society to work toward one end, for example equality or material security, and to keep its freedom. In the end, according to Hayek, the masses will become serfs, serving those who hold the power in government.
Below are a few out of the fifteen quotes from Road to Serfdom that will give you an idea of some of his concerns. If you haven’t read the book, it’s a good one to add to your reading list, so says the book reviewer.
These key quotes I have lifted out of the fifteen are tangential to the way the Senator Ahmed Lawan led National Assembly has sold out the soul of the Ninth session of the National Assembly and has invariably set Nigeria on the ROAD TO SERFDOM.
The first says: “Hitler did not have to destroy democracy; he merely took advantage of the decay of democracy and at the critical moment obtained the support of many to whom, though they detested Hitler, he yet seemed the only man strong enough to get things done.”
Secondly: “The younger generation of today has grown up in a world in which in school and press the spirit of commercial enterprise has been represented as disreputable and the making of profit is immoral, where to employ a hundred people is represented as exploitation but to command the same number as honorable.”
Thirdly, another quote goes thus: “Once you admit that the individual is merely a means to serve the ends of the higher entity called society or the nation, most of those features of totalitarian regimes which horrify us follow of necessity.”
Arend Lijphart a political scientist told us truly, “That it is difficult to achieve and maintain stable democratic government in a plural society is a well-established proposition in political science-with a history reaching back to Aristotle’s adage that “a state aims at being, as far as it can be, a society composed of equals and peers.” Social homogeneity and political consensus are regarded as prerequisites for, or factors strongly conducive to, stable democracy. Conversely, the deep social divisions and political differences within plural societies are held responsible for instability and breakdown in democracies.”
The Scientist argues that the fundamental framework of non-Western politics is a communal one and all political behavior is strongly colored by considerations of communal identification.
Such communal attachments are he says, are what Clifford Geertz calls “primordial” loyalties, which may be based on language, religion, custom, region, race, or assumed blood ties. The subcultures of the European consociational democracies, which are religious and ideological in nature and on which, in two of the countries, linguistic divisions are superimposed, may also be regarded as primordial groups-if one is willing to view ideology as a kind of religion.
All of these societies, Western and non-Western, will be referred to here as plural societies. And the definition of this term, supplied earlier in this chapter, closely approximates the meaning in which J. S. Furnivall used it. It is worth noting that Almond’s and Furnivall’s conceptual frameworks are fully compatible, because Furnivall explicitly included cultural differences as one of the characteristics of plural societies: “Each group holds by its own religion, its own culture and language, its own ideas and ways.”
The author postulated thus: “He defines a plural society as one in which such “different sections of the community [live] side by side, but separately, within the same political unit.” This concept is somewhat narrower than Geertz’s because it does not include regional differentiation. Furnivall’s plural society is one of geographical mixture but mutual social avoidance: “It is in the strictest sense a medley [of peoples), for they mix but do not combine.” The broader definition will be followed here because it fits the purposes of this study’s broad Comparative exploration best, despite the frequent criticism that the concept of plural society is too broad and encompasses too much”. (Democracy in Plural Societies, a Comparative Exploration by Arend Lijphart).
The above polemics best describe the state of Nigeria’s democracy which currently runs on autopilot with no legislative engine.
The legislature in Nigeria is long pocketed by the executive arm of government and the following steps on foreign loans by the National Assembly points directly to OUR ROAD TO SERFDOM.
On December 16, 2019 we were told that the Senate President, Ahmad Lawan, gave the clearest indication yet that the Senate would approve a $29.96 billion loan request by President Muhammadu Buhari.
Mr Lawan, while addressing journalists in Abuja, said the Senate would approve the loan request but would ensure adequate oversight.
“We are going to be critical that every cent that is borrowed is tied to a project,” Mr Lawan said in response to a question by a journalist.
A similar request by Mr Buhari to the 8th Senate led by Bukola Saraki was rejected.
On 01 June 2021, the Nigerian Senate gave its committee on Foreign and Local debt 14 days within which to process President Muhammadu Buhari’s request for a fresh ₦2.343 trillion ($6.183 billion) for approval.
Senate President Ahmad Lawan gave the directive at the commencement of Tuesday’s plenary session shortly after the Senate Majority leader, Yahaya Abdullahi, drew the attention of the Senate to the pending request.
The Senator Clifford Ordia-led committee on Foreign and Local debt had approved a total of $28 billion so far.
The current request will take the total loan approved to $35.683 billion.
Buhari had urged the Senate to approve N2.3trn ($6.183bn) external borrowing.
On December 16, 2019 it was said that the President of the Senate, Ahmad Lawan, had said that the Senate would approve President Muhammadu Buhari’s request to borrow $29.96 billion.
He gave the indication while addressing a gathering of reporters on Monday in Abuja, the Federal Capital Territory.
The Senate President said, “The question of whether we are going to pass the loan request of the Executive arm of government; yes.
“If you don’t have money and you have projects that after you do them they will not only provide the infrastructure that you need but also spin money, nothing will really militate against the passage.”
The 8th Senate led by former Senate President Bukola Saraki had rejected President Buhari’s loan request in 2016 due to the lack of details.
My legal consultant Mrs. Agatha Ndibe has done a detailed research to support my conclusion that Senator Ahmed Lawan and the National Assembly are leading Nigeria into SERFDOM.
MEANING OF FOREIGN LOAN: Foreign loan refers to the loans obtained by a country from a foreign entity. That foreign entity could either be a political state or business entity. The Longman Business Dictionary defines foreign loan as a loan to a country or organization or financial institutions.[1] In this type of loan the foreign state or organization could be a lender or a borrower. States can also grant foreign loan to non state actors such as international organizations.
CHARACTERISTICS OF FOREIGN LOANS-: The major characteristics of foreign loans are as follows:
It is an international agreement. This means that parties are bound by international law especially Vienna Convention on Laws of Treaties, 1969. It is also by other international instruments like UNCTDA Guidelines on Responsible Sovereign Lending and Borrowing and Vienna Conventions on the Laws of Treaties between States and International organizations or between International Organizations, 1986.
Foreign Loans are sometimes Standard Terms Contract. This means that it is a contract that is set up by one party in which the terms and conditions are drafted by one party. In this contract it is the party lending the money that dictates the terms of the contract. It has little or no room for negotiation for the borrowing party. The other party has either to take it or leave it.[2] That is the situation that Nigeria finds itself with China before signing loan agreement with the Chinese EXIM Bank.
There are no equal bargaining powers. The party borrowing is usually at the disadvantage because of its inability to negotiate certain terms to their taste. As such, it is highly restrictive to the rights of one of the parties.[3]
The Lenders, at most time determined where the arbitration or jurisdiction of the court will be, in case of any legal disputes. Most of the times the lending entity or the states decides the jurisdiction for settlement of disputes.
Collateralization of national assets in case of default. This means that in case of defaults in compliance with the terms of the contract, the assets of the borrowing party will be taken as collateral.
The State parties are exempted from pleading their sovereign immunities in complying with contractual terms.
CONSEQUENCES OF FOREIGN LOANS
1. Lower national saving and income
2. Higher interest payments leading to large tax hikes and spending cuts
3. Decreased ability to respond to problems.
4. Greater risks of a fiscal crisis
STATUS OF PARTIES IN FOREIGN LOANS
The status of parties in foreign loans is that of legal personalities involving in international contract. Therefore both of them could be termed as subject of international agreement. In case where a sovereign state engaged a foreign company as in this case between Nigeria and China, international law will apply.[4] Thus, all of them are subjects of international law. This is more apposite considering the provisions of Article 2 (1) (a) of the 1986 Convention on Treaties between States and International Organizations or International Organizations, which defines agreements between states and international organizations to be bound by international law. At such a state or transnational entity cannot deploy its sovereign immunity in its commercial engagement. This is captured in the case of Trendtex Trading Corporation V Central Bank of Nigeria[5] where the legal regime that restricts deployment of sovereign immunity was upheld to mean that where a state engaged in commercial transaction, it cannot be immune from legal responsibility.
LEGAL INSTRUMENTS REGULATING FOREIGN LOANS IN NIGERIA
The legal instruments regulating foreign loans in Nigeria include both international and municipal laws. The international laws which Nigerians are signatories to include:
Vienna Convention on Laws of Treaty,
the United Nations Conference on Trade and Development,
Rules of International Chamber of Commerce (ICC)
VIENNA CONVENTION ON LAWS OF TREATY, 1969
This law governs international treaties between states and other transnational corporations. It provides for the need of parties to respect the terms of treaties (including contracts) and perform it in good faith. This is known as pacta sunct servanda. [6]It also prohibits parties not to invoke their national laws to avoid performing their contractual obligations, except in certain circumstances.[7] Nigeria is a signatory to the VCLT, 1969. Thus, Nigeria is under a legal obligation by international law to comply with the terms of its loans agreements with any country or multinational company it entered into contracts with.
THE UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTDA)
This is another soft law signed by both China and Nigeria.[8] The law governs all aspects of international trade. The specific aspect that governs borrowing and lending is UNCTDA Guidelines on Responsible Sovereign Lending and Borrowing (hereafter refers to as Guidelines). Principle 1 provides for the need of the public officials involved in borrowing and lending to act in public interest. In other to ensure public interest and transparency are promoted, Principle 10 of the Guidelines makes provision for openness in the procedures for lending and borrowing of loans. This is meant to promote fiscal transparency in policy making involving the legislatures and the executives. The guidelines also provides for rights of the parties to access information.
RULES OF INTERNATIONAL CHAMBER OF COMMERCE (ICC)
This is a global instrument that regulates peaceful resolution of disputes in international commerce. It provides for the arbitration in case of disputes arising from contracting parties. The award reached by the arbitration is enforceable in about 145 countries.[9] Incidentally both China and Nigeria are signatories to the Rules of ICC. [10]
Also, the ICC has a Rule for Documentary Instruments Dispute Resolution Expertise (DOCDEX). It helps in fast and effective settlement of dispute arising from disputes relating to letters of credits. It is also responsible for settling disputes relating to bank –to-bank reimbursement and collections. Once the parties submitted themselves to DOCDEX’s Rule, they are meant to abide by the decision as a binding contract.
MUNICIPAL LAWS
The municipal laws that regulate foreign loan include:
The Constitution of The Federal Republic of Nigeria 1999 (2010 as amended)
Debt Management (Establishment) Bureau, 2011,and
Fiscal Responsibility Act, 2007
THE CONSTITUTION OF THE FEDERAL REPUBLIC OF NIGERIA 1999 (2010 AS AMENDED)
The control of public funds is one of the constitutional functions of the Nigerian legislature. This is meant to ensure transparency and accountability in the management of public funds. The constitution provides for the power of Nigeria government to grant aid to a foreign state. This is seen in the provision of section 164 (2) of the Constitution which provides that:
The federation may make external grants to a foreign State or any international body in furtherance of the foreign policy objectives of Nigeria in such sums and subject to the terms and conditions as may be prescribed by the National Assembly.
The import of the above provision is that the power of Nigeria government to grant foreign aid is subject to the directives and prescription of the parliament. It also means that the grants to that foreign body must be in the interest of Nigeria’s foreign policy. Also the amount of the money granted as well as the terms and conditions associated with the grant must be prescribed by the Nigeria’s parliament.
With respect to external borrowing, the constitution is not that specific on the powers of National Assembly, as in the case of external grant. Rather, it is through the oversight functions of Nigeria parliament that they can regulate external borrowing. Moreover, since the National Assembly exercised control over Consolidated Revenue Fund it is the firm position of this writer that it still has the constitutional authority to exercise power over external loans obtained by Nigeria.[11] However, there are other statutory bodies that empowers parliament to authorize external borrowings. These laws include Debt Management (Establishment) Bureau, 2011 and Fiscal Responsibility Act, 2007. These laws are discussed in the subsequent parts of this work.
DEBT MANAGEMENT BUREAU (ESTABLISHMENT) ACT 2011
This law provides for the legal procedures for obtaining and granting foreign loan. These procedures are examined below.
Legal Procedures On Obtaining Foreign Loan
The Debt Management Bureau (Establishment) Act, 2011 (hereinafter known as DMB Act) empowered the National Assembly to exercise authority over the role of the executive with regards to obtaining foreign loans. It is for this reason that section 4(d) provides that the Debt Management Bureau shall issue from time to time guidelines on external borrowings among others functions. Nevertheless, this exercise of power is subject to the approval of the National Assembly. This means that the Bureau shall update the parliament and the public about the current status of Nigerian foreign debt as to whether it is satisfied or pending. It is also the duty of the Bureau to issue guidelines and procedures on how to obtained, use and manage those funds.
Furthermore, section 16 (22) of DMB Act, 2011 provides that the Bureau alongside the Ministry of Finance shall lead the negotiations and acquisition of foreign loans. This became necessary because negotiation of foreign loans is an art diplomatic engagement which is the function of the executive. However, for such loan to be accepted it has to be fully scrutinized and accepted by Nigeria’s parliament.
Therefore, it is obvious from the provision of this law; that the National Assembly shall be a party in the confirmation of the terms and conditions of any foreign loan. However, during the negotiations of Nigeria’s loan with Chinese EXIMBANK, there was a disagreement on whether or not the national assembly was carried along. While others maintain that the parliament was carried along but they were not meticulous in the appraisal of the loan terms. [12] The statutory power of the National Assembly to approve the standard terms and conditions is captured in section 21 (1) which provides that the standard terms and conditions approved by the National Assembly shall form the basis for the negotiation and acceptance of external loans and issuance of guarantees.
From the expositions in the preceding paragraphs, it is evidence that there was no compliance with due processes by state agencies that represented Nigeria.
Dear Citizens, are we going to remain blindfolded as Senator Ahmed Lawan and other Presidential lackeys lead the nation into slavery? Arise oh compatriots and say no to servitude!
* EMMANUEL ONWUBIKO is head of the HUMAN RIGHTS WRITERS ASSOCIATION OF NIGERIA (HURIWA) and was federal commissioner of the NATIONAL HUMAN RIGHTS COMMISSION OF NIGERIA.
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