The federal government has uncovered previously unknown payments to the daughter of a Nigerian official, its lawyer told a court on Monday, in its latest attempt to overturn an arbitration award against it worth close to $10 billion. Process & Industrial Developments (P&ID), a firm set up to carry out a gas project in Nigeria, won a $6.6 billion arbitration award after the 2010 deal collapsed. The award has been accruing interest since 2013 and is now worth nearly $10 billion. Nigeria is seeking permission in the English courts to appeal the award, granted in 2017, despite having missed the 28-day appeal deadline.
Meanwhile the Central Bank of Nigeria added maize to the 41 items denied access to foreign exchange as it has asked banks to stop processing new documents for maize imports into the country with immediate effect, the bank said in a circular. The central bank said it wanted to support the increase in local production, stimulate the economy and safeguard rural livelihoods lost as a result of the COVID-19 pandemic. The bank asked dealers to submit existing import documents, called Form M, opened for importation of maize by Wednesday. Form M is a document to be completed by all importers into Nigeria. The documentation also enables lenders submit bids to the central bank for hard currency to pay for the imports. The government is seeking to fund a balance of payment gap of around $14 billion in 2020, according to central bank data. Dollar demand has been swelling and piling pressure on the Naira.
Importers with past due obligations have scrambled for hard currency while providers of foreign exchange, such as offshore investors, have exited. The oil price crash caused by coronavirus pandemic has exacerbated a shortage of dollars for Nigeria, whose reserve has declined 20% to $36.13 billion over the last year. Last year, the central bank told lenders to stop processing milk imports on a credit basis after it said it would ban access to forex for diary to spur local production. It later lifted forex restrictions for milk imports for six firms.
It says new information came to light only in late 2019. In an online English court hearing, the Nigerian government’s lawyer said it has evidence of payments from companies related to P&ID to Vera Taiga, one 11 days before the deal was signed. Vera’s mother, Grace Taiga, was the chief lawyer for the Petroleum Ministry at the time. The government said one payment of $4,969.50 was made on Dec. 30 2009, and a second of $5,000 on Jan. 31 2012. The payments came to light following a U.S. discovery order in New York, it said. The government also said P&ID officials, and companies linked to it, paid several other officials in relation to the deal.
A message to Vera Taiga on LinkedIn was not immediately returned. Nigeria’s anti-graft agency charged Grace Taiga last year with accepting bribes and failing to follow protocol related to the contract. She has pleaded not guilty and awaits trial. Last week, Nigeria suspended the head of the anti-corruption body leading the investigation after the attorney general accused the agency of diverting funds that had been recovered during graft investigations. Ibrahim Magu, head of the Economic and Financial Crimes Commission (EFCC), has not responded to requests for comment.
P&ID has said Nigeria is engaged in a “manufactured fraud investigation” that has denied its subjects due process. In a skeleton legal argument, its lawyers said the payments were legitimate and for medical expenses. The hearing will continue on Tuesday, and the judge’s ruling will determine whether the government can continue its appeal and present its full case of alleged fraud in the English courts.
