In the last two years, the Federal Government has been battling various court litigations over contract disputes and damage claims which could cost the government about N7.5 trillion.
Investors King learnt that several local and foreign companies have filed lawsuits against the Nigerian government over breach of contracts that were signed as far back as 2006.
Just last week, the Federal Government agreed to pay a foreign company engaged to revamp the dilapidated Ajaokuta Steel mill $496 million over a breach of signed contract agreement.
In June 2021, Sunrise Power Transmission Company of Nigeria Limited also filed a fresh against the Federal Government at the International Court of Arbitration, Paris, seeking $400 million over breach of contract concerning a 3,050MW plant in Mambilla in Taraba State. This was in addition to the $2.354bn earlier filled by the same company.
Similarly in December 2021, Matreach Logistics Limited listed the Nigerian Ports Authority and the Attorney-General of the Federation and Minister of Justice in a suit it filed against Shell Production Development Company (SPDC).
Matreach Logistics Limited argued that it was one of the Stevedoring service providers recommended by the Federal Ministry of Transport in 2012 for appointment to carry out dock labour operations within Bonga on/offshore terminal operated by SPDC.
It said the SDPC refused it access to the Bonga onshore/offshore terminal, a thing the firm claimed amounted to frustration and breach of contract.
It will cost Nigerians very dearly if the country lost all or some of these cases. Nigeria is already using 90 percent of its revenue to service debt. Paying about N7.5 trillion as damages for contract disputes will further worsen the country’s financial situation.
According to Olu Daramola, a Senior Advocate of Nigeria at Afe Babalola’s Chamber, he disclosed that most cases against the government are due to negligence and poor handling leading to judgment against the government. Some of these cases are poorly defended.
Meanwhile, another Senior Advocate of Nigeria, Ifedayo Adedipe advised the Federal Government to settle out of court.
He said, “If the issue is a breach, they should settle out of court; it’s cheaper and faster.
Nigeria’s GDP Grows by 3.46% in Q4 2023, Driven by Services
Nigeria’s Gross Domestic Product (GDP) grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, according to data released by the National Bureau of Statistics (NBS).
The GDP expansion though slightly lower than the 3.52% recorded in the same period of 2022, reflects a positive trajectory for the Nigerian economy amid ongoing challenges.
The growth rate surpassed the 2.54% recorded in the preceding quarter, indicating a rebound in economic activity.
The services sector emerged as the key driver of growth expanding by 3.98% and contributing 56.55% to the overall GDP.
This sector’s resilience underscores its pivotal role in Nigeria’s economic landscape, encompassing diverse industries such as telecommunications, finance, and real estate.
Also, the agriculture sector experienced growth, expanding by 2.10% compared to the same period in 2022.
Meanwhile, the industry sector recorded a notable improvement, growing by 3.86%, a stark contrast to the -0.94% contraction observed in the fourth quarter of 2022.
On an annual basis, Nigeria’s GDP expanded by 2.74% in 2023 compared to 3.10% in the previous year, reflecting sustained but moderated growth.
The positive trajectory in GDP growth reflects resilience in the face of various economic challenges.
However, sustaining and accelerating growth will require continued efforts to address structural bottlenecks, foster investment, and promote inclusive economic policies across sectors.
Nigeria’s Oil Sector Growth
During the fourth quarter of 2023, Nigeria’s oil sector posted a real growth rate of 12.11% year-on-year, signifying a significant improvement from previous periods.
This was driven by the surge in average daily oil production to 1.55 million barrels per day (mbpd), a positive shift in the sector’s performance.
Despite challenges such as global market fluctuations and production constraints, the oil sector contributed 4.70% to the nation’s total real GDP in Q4 2023.
Nigeria’s Non-Oil Sector
Nigeria’s non-oil sector sustained growth momentum, posting a 3.07% real growth rate in Q4 2023.
This growth was primarily attributed to key industries including finance, telecommunications, agriculture, manufacturing, and construction.
Accounting for 95.30% of the nation’s GDP in the same quarter, the non-oil sector continues to drive economic diversification efforts and reduce dependence on oil revenues.
Despite facing challenges, such as infrastructure deficits and regulatory bottlenecks, the sector’s resilience underscores its pivotal role in fostering sustainable economic development and inclusive growth agendas.
Senate Rejects Ministry of Power’s Proposed Electricity Tariff Hikes
The Nigerian Senate has firmly opposed the Ministry of Power’s proposed electricity tariff hikes, emphasizing the need to alleviate the burden on citizens amidst prevailing economic hardships.
The rejection comes as a response to the Ministry’s consideration of increasing electricity tariffs and removing subsidies in the face of escalating economic challenges across the nation.
During a recent plenary session, Senator Aminu Abbas moved a motion urging the Senate to retain electricity subsidies to mitigate the impact of rising living costs on Nigerians.
The motion garnered unanimous support, with senators expressing concerns over the implications of tariff hikes on an already financially strained populace.
The Senate’s resolution also directed the Committee on Power to conduct a comprehensive investigation into the N2 trillion required for electricity subsidy payments, outstanding debts within the sector, and the state of metering nationwide.
This decision reflects the Senate’s commitment to ensuring transparency and accountability in the power sector’s financial management.
The rejection underscores the Senate’s stance against policies that could exacerbate the financial burdens faced by Nigerian citizens.
The move aligns with the Senate’s broader efforts to prioritize the welfare of the populace and advocate for measures that promote economic stability and affordability.
Nigerian Oil Transporters End Two-Day Operation Suspension After Government Intervention
After a two-day suspension of operations by the Nigerian Association of Road Transport Owners (NARTO), oil transporters have resumed operations following government intervention.
The suspension had caused fuel queues in many states and the Federal Capital Territory, raising concerns among motorists.
The resolution came after talks mediated by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, in Abuja.
Representatives from NARTO, government officials, and stakeholders from the downstream oil sector were present at the meeting.
The agreement reached includes an adjustment in the freight rate for petroleum transporters and a commitment to address other concerns raised by NARTO members.
The decision to resume operations aims to alleviate the challenges faced by Nigerians in accessing petroleum products.
Yusuf Othman, the President of NARTO, confirmed the end of the suspension, urging members to return to work.
The association had initially suspended operations due to the high operational costs, particularly the escalating price of diesel needed to power their trucks for product transportation across the nation.
With operations now back on track, it is hoped that the resumption will help stabilize fuel distribution and prevent further scarcity, ensuring smoother access to petroleum products for consumers across Nigeria.
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