A Non-Governmental Organisation, the
Committee for the Defence of National Interests (CODNI), has warned against
alleged secret moves by the National Assembly to hurriedly amend Act
establishing the Nigeria Liquified Natural Gas (NLNG) before the end of this
week. The warning was contained in a statement issued on Wednesday in Lagos and
signed by the group’s National Coordinator, Mr. Zach Ezoh.
CODNI said in the statement that
information at its disposal indicated that the Federal lawmakers have perfected
plans to hurriedly amend the NLNG Act possibly on Thursday so as to pave the
way for the sale of the Federal Government’s shares in the NLNG. “We wish to
alert the general public about this invidious plot and to call on patriotic
members of the National Assembly to rise to the occasion and prevent this
looming economic catastrophe as it will further compound the country’s woes,”
CODNI said.
The group warned the lawmakers not
to do anything to tamper with the NLNG Act, describing such as a miscalculation
which would effectively kill the goose that lays the golden egg for the
country’s economy. “We wish to appeal to the conscience of our lawmakers not to
allow this economic tragedy to befall our dear nation. It is said that you do
not change a winning strategy. The NLNG as it presently is has proved to be a
roaring success. There is, therefore, no cogent reason to tamper with the Act
establishing this national cash cow,” the statement said.
CODNI noted that NLNG, which was incorporated after
over 30 years of unsuccessful efforts by successive Nigerian administrations to
attract foreign investors in the LNG sector, has been an outstanding success.
“From the initial investment of US$6.0 billion at its incorporation on May 17,
1989, the NLNG now has an asset base of over $11 billion, generated over $90
billion in revenues and has contributed over US$15 billion to the Nigerian
government in dividends over the last 12 years,” CODNI noted.
It further noted that the company
has also paid a total of over US$5.5billion in taxes comprising Companies
Income Tax, Tertiary Education Tax, WHT, VAT and other payments to Government
including PAYE, state and local government taxes, as well as regulators’ levies
and fees totalling over N51 billion.
CODNI pointed out that the NLNG Act,
which has been ratified by the Nigerian Constitution as an Act of the National
Assembly, has as its basis, a contract between the Federal Government of
Nigeria and the Shareholders of Nigeria LNG Limited (“NLNG”). The group noted
that this contract includes Incentives, Concessions, Guarantees and Assurances
which were provided for and also reaffirmed in Letters of Assurance to lenders
for the Nigeria LNG Trains 4 and 5 expansion by the then Minister of Finance,
Minister of Justice and Attorneys-General of the Federation and the Central
Bank Governor.
“The main thrust of the Guarantees
and Assurances were to assure the foreign Investors that their investments
would be protected by the non-amendment of the NLNG Act. It is instructive to
note that the Act has been protected by all administrations from inception, in
recognition of the sanctity thereof,” CODNI said.
It reminded the lawmakers that
NLNG’s shareholders have treaty protection under Bilateral Investment Treaties
(“BITs”) entered into by Nigeria with France, The Netherlands and the United
Kingdom.
“To amend or change the NLNG Act
would portray Nigeria as a promise-breaker and untrustworthy, damaging the
country’s reputation and hamstringing its ability to attract foreign
investment. It could also mean an immediate loss of foreign investment of US$25
billion in respect of Train 7 investment (USD$15 billion by the upstream and
USD$10 billion for construction).
“In addition, any amendment could
result in loss of income of between US$53m – US$124m being amount attributable
to the Nigerian Government in form of dividends, and related Withholding tax.
Further immediate impact would also be the potential loss of about 18,000 jobs
required for the construction activities for Train 7,” the group said.
SIGNED
Zach Ezoh
National Coordinator, CODNI
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