Federal Government’s move to borrow an additional $4.179 billion has sparked outrage across the country.
This has prompted economists and financial analysts to warn against Nigeria’s debt profile and the repercussions for the economy.
The most recent statistics published by the Debt Management Office (DMO) revealed that as of March 2021, the country’s debt profile was $87.24 billion (N33.1 trillion).
However, unknown to many, another $15billion ‘debt’ hangs ominously over the nation, causing concerns in some quarters.
In what appears to be a brazen attempt to outwit the country, oil and gas firm, Petro Union Oil and Gas Limited (Petro Union) is pushing for a default judgement to compel the Central Bank of Nigeria (CBN) and Union Bank of Nigeria (Union Bank) to deplete their treasuries by $15billion over a transaction which has been classified as fictitious and fraudulent.
The company claims that it brought £2.56bn into the country via a cheque from a branch of Barclays Bank in the UK and deposited it with a Union Bank branch sometime in 1994. However, following the deposit of the cheque, the UK-based Barclays Bank was contacted and it confirmed that the account from which the cheque was drawn was closed on September 21, 1989, whereas the cheque was issued on December 29, 1994 –five years after the account was closed. This discovery was reported to the Economic and Financial Crimes Commission (EFCC), which absolved the CBN and Union Bank of any wrongdoing after its own investigations. Quite baffling is the fact that despite these revelations, Petro Union has been successful in pursuing the alleged fraud case up to the Court of Appeal where it obtained judgement that Union Bank received the said £2.556 billion on its behalf and transferred £2,159,221,318.54 to the CBN while it retained £396,778,681.46 as commission.
The judgment obtained by Petro Union at the Federal High Court in 2014 for the sum of £2.556 billion also carries interest of 15 per cent per annum from June 22, 1995 until payment.
Today, that judgment sum together with interest exceeds £12 billion (about $15.5 billion). In response to the judgement, both the CBN and Union Bank approached the Court of Appeal requesting it to set the case aside and execute justice.
While Union Bank’s appeal was dismissed, that of the CBN is still pending at the appellate court since 2016 when it was lodged. Union Bank further approached the Supreme Court asking the apex court to set aside the judgement of the lower courts, especially considering the fact that Petro Union officers were last year arrested and are currently undergoing criminal prosecution at the Federal High Court, Lagos.
Both CBN and Union Bank have maintained that the judgements against them were obtained by fraud, because most of the facts presented to the court were false, as there was no £2,556,000,000.00 brought into Nigeria as the courts are being made to believe.
“All this appears to be an attempt by a cartel to lay claim to a nonexistent imported sum of £2,556,000,000.00 at the expense of Nigeria” they said.
At a time when Nigeria battles a rapidly growing debt profile, an additional $15.5 billion debt which represents 45 percent of its foreign exchange reserves (as of March 2021); and 42 percent of the 2021 budget portends gloom for the economy.
Some Nigerians have likened the Petro Union case to the infamous $10 billion Process & Industrial Development Limited (P&ID) fraud case, and have expressed the hope that the apex court will, once again, execute unbiased justice in defence of the truth.