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Recession Inevitable, Says Osinbajo as FG Restates Resolve to Restructure Economy

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Recession

Vice-President Yemi Osinbajo on Tuesday reviewed the state of the economy and explained that the prevailing recession was necessitated by the loss of 60 per cent of the nation’s revenue in the first quarter of the year to the violent activities of militants and economic sabouteurs in the Niger Delta.

But he gave assurances that the recession would be short-lived because the federal government was putting in place some mechanisms that would aid the quick recovery of the economy.

The vice-president, who spoke at a convocation in Ede, Osun State, enjoined Nigerian youths to multitask in order to break even.

Osinbajo’s assurances of a quick return to better days was echoed in China by the Minister of Trade and Industry, Dr. Okechukwu Enelamah, who restated the federal government’s resolve to restructure the economy, saying that its policies focused on diversifying revenue sources would help the economy speed up the recovery process.

Explaining Nigeria’s sharp fall into recession, Osinbajo explained that there was no way the country could have avoided the recession since it had in February lost 60 per cent of its revenues to the activities of saboteurs.

He also identified pipeline vandalism coupled with the errors of some past leaders as some of the reasons for the current economic situation in the country.

The vice-president enjoined youths, especially young graduates to be diligent and take advantage of various international trading platforms to improve their status.

Also speaking at the convocation, a Global economic analyst, Mr Dick Kramer, in a lecture entitled, “Nation Building and Nigeria’s Economic Challenges,” said the country was in recession because it had failed to build a strong private economy over the years and also failed to create an economy based on industries.

While noting that the global economy had been relatively weak in the last 18 years, Kramer said Nigeria needed a new long term economic plan which must entail fostering an effective public/private partnership.

Also a former Minister of Defence, Lt-Gen Theophilus Danjuma (rtd), called for serious investment in the education system in view of its impact on the socio-economic development of the country.

Speaking in China, the Minister of Trade and Industry, Enelamah, said the federal government was taking advantage of the difficult economic conditions arising from the sharp fall in oil prices to restructure the economy.

He said China would continue to be an important partner in Nigeria’s ongoing quest for sustainable growth and development.

The minister spoke during a panel discussion at the Second ‘Investing in Africa’ Forum, which took place in Guangzhou, China, and was organised by the government of China’s Guangdong Province, the China Development Bank, and the World Bank Group.

Enelamah said: “Our principal economic policy direction in Nigeria is to diversify the economy, away from the longstanding traditional reliance on oil exports. We are taking steps to structurally transform the economy, so as to restore growth and create jobs.”

He listed some of the steps the government was taking to include: “Strategically aligning monetary, fiscal and structural policies, to engender much-needed investors’ confidence; creating a private-sector driven Presidential Council on Ease of Doing Business that will initiate and implement far-reaching business environment reforms; repositioning the Nigeria Investment Promotion Council to enable it effectively fulfil its core mandate, among others.”

According to the minister, the NIPC would provide the needed incentives and ‘aftercare’ services to investors, as well as proactively create regular opportunities for investors’ engagement.

The minister highlighted a number of “strategic” sectors for intending and potential investors in Nigeria to include: Agriculture and Agro-Processing, Automotive, Infrastructure (Roads, Rail, Ports and Power), Real Estate, Pharmaceuticals, and the Digital Economy.

In his closing remarks, Enelamah praised the ongoing cooperation between China and Nigeria on the part of both governments, and also the private sector.

Enelamah said: “The China miracle is one that provides very many useful lessons from which Nigeria can borrow, and is borrowing. Nigeria will continue to work hard and in close partnership with China for mutual benefits, growth and development.”

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Ukraine Strikes Russian Fuel Depot, Sparking Fires in Belgorod Region

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Russian Mercenaries

The governor of Russia’s southern Belgorod region said on Sunday Ukrainian forces attacked a fuel depot, triggering a series of fires after Moscow and Kyiv accused each other of launching overnight attacks on border regions.

“The Ukrainian military, aided by lethal drones, attacked a fuel storage site in Volokonovsky district,” Vyacheslav Gladkov wrote on Telegram, referring to an area near the border.

“Several reservoirs caught fire in an explosion. Firefighting crews are putting out the blaze.”

Gladkov also reported drone attacks on three other localities. There were no casualties reported in the incidents.

In the overnight air attacks, Ukrainian officials said two people died and four were injured in Sumy region. Gladkov reported three civilians were injured in Belgorod.

Two children were among those injured in Sumy, the military administration of the northeastern Ukrainian region said on Sunday on Telegram. Several homes and cars were damaged.

In Belgorod region, three civilians, including two children, were injured. Gladkov said two residential buildings were destroyed and more than 15 buildings in total were damaged.

The Russian defence ministry said it had destroyed one drone over Belgorod region and another over Kursk region, where Ukrainian forces launched a cross-border incursion last month. It said two drones were intercepted over Belgorod overnight.

Border regions on both sides have been subject to frequent attacks. Both Moscow and Kyiv deny targeting civilians, saying the attacks are aimed at destroying each other’s infrastructure critical to war efforts.

Thousands of civilians have died in the war, which Russia started with a full-scale invasion on Ukraine in February 2022. Millions of Ukrainians have also been displaced, while their cities and villages have become piles of rubble

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Ghana Ordered to Pay $111.5M to Power Company After U.S. Court Ruling

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ghana

The government of Ghana has been ordered to pay $111.5 million to Ghana Power Generation Company (GPGC) following a ruling by a District of Columbia Court in the United States.

This ruling was granted in favor of GPGC after Ghana failed to respond to an earlier tribunal ruling from the United Kingdom, which found the country in breach of a power purchase agreement.

The court’s decision comes after Ghana terminated its contract with GPGC on February 18, 2018. The UK tribunal, in its final award dated January 26, 2021, found that Ghana had violated its contractual obligations, resulting in significant financial damages for GPGC.

The tribunal initially awarded GPGC $134.3 million in damages, calculated using the Early Termination Payment formula as specified in the purchase agreement.

Ghana, however, did not comply with the tribunal’s verdict, prompting GPGC to pursue the matter in U.S. courts. On January 19, 2024, GPGC filed a lawsuit in the District of Columbia, citing the Federal Arbitration Act and the New York Convention, which provides for the recognition of international arbitration awards.

Court documents reveal that the petition was formally delivered to Ghana’s Ministry of Foreign Affairs and Regional Integration on January 23, 2024.

Despite receiving the legal documents, Ghana failed to respond to the court proceedings by the March 29, 2024, deadline. This non-response led the U.S. court to grant a default judgment in favor of GPGC.

Chief Judge James E. Boasberg emphasized that the arbitral judgment fell under the New York Convention, which requires member states, including the United States, to recognize and enforce international arbitration awards.

He further noted that Ghana had voluntarily submitted to international arbitration when entering the power purchase agreement, waiving its sovereign immunity in the process.

Although GPGC was not awarded pre-judgment interest, Ghana will be obligated to pay post-judgment interest at rates set by U.S. law.

This adds an additional financial burden to the $111.5 million judgment as the payment accrues further interest over time.

The country narrowly avoided a separate $11 billion arbitration award in the infamous P&ID case, which was eventually overturned due to findings of corruption and bribery.

However, in the GPGC case, multiple European courts have upheld enforcement orders, leaving Ghana with limited legal recourse.

The court’s decision is expected to place added pressure on Ghana as it faces mounting financial obligations related to international arbitration disputes.

GPGC has indicated that it will pursue all available legal avenues to ensure full recovery of the damages awarded by the tribunal, including possible enforcement actions in other jurisdictions.

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Zhongshang Fucheng Moves to Auction Nigerian Properties in UK Following $70M Arbitration Award

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Bola Tinubu

Zhongshang Fucheng Industrial Investment Ltd has escalated its efforts to collect a $70 million arbitration award from Nigeria by putting two residential properties in Liverpool up for sale.

This significant development follows a 2021 arbitration verdict against Nigeria, which remains unsettled.

The Chinese investment group has reportedly listed two buildings linked to the Nigerian government—15 Aigburth Hall Road and Beech Lodge, 49 Calderstones Road—on the global online marketplace eBay.

The move is part of a broader strategy to recover the outstanding $70 million, which includes a principal amount of $55,675,000, plus interest and legal costs, as stipulated by the arbitration verdict.

The arbitration stemmed from a dispute between Zhongshang Fucheng and Ogun State over a trade treaty violation.

The company claimed that Ogun State rescinded its rights to a free trade zone in 2016, prompting a legal battle that saw Zhongshang’s executives expelled from Nigeria.

The British court granted Zhongshang the authority to seize Nigerian assets in the UK after the Nigerian government failed to settle the arbitration judgment.

The seizure and subsequent auction of these properties mark a pivotal moment in the ongoing legal conflict.

The properties were confiscated because they were not classified as diplomatic or consular assets, making them subject to seizure under the court’s orders.

According to sources familiar with the situation, the properties are valued at approximately $2.2 million.

Zhongshang Fucheng has opted for an online auction to expedite the sale, aiming to reach a broad pool of potential buyers.

The decision to use eBay highlights the company’s commitment to transparency and swift asset recovery.

“This move is not just about recovering the funds; it’s a demonstration of our commitment to enforcing the arbitration award and ensuring that due process is followed,” said a consultant working with Zhongshang Fucheng, who spoke on condition of anonymity.

The Nigerian government, already grappling with similar arbitration cases, is facing increased scrutiny as European courts have granted enforcement orders in several countries, including the UK, Belgium, and France.

The ongoing conflict with Zhongshang Fucheng has intensified pressure on Nigerian authorities to address these legal and financial challenges more effectively.

In June 2024, the UK High Court, King’s Bench Division, ruled in favor of Zhongshang’s right to seize the Liverpool properties.

Master Lisa Sullivan’s ruling emphasized that the properties were used for commercial purposes, thereby excluding them from sovereign immunity protections.

The case against Nigeria underscores broader issues related to international arbitration and asset recovery, reflecting a growing trend of global legal disputes over state assets.

For Zhongshang Fucheng, the auction of the Liverpool properties represents a critical step in securing the funds awarded by the arbitration panel.

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