Musings From Abroad

Chinese firm Zhongshan alleges Nigerian govt detained, assaulted its officials

Published

4 months ago

August 17, 2024

The management of Chinese company, Zhongshan Fucheng Industrial Investment Company Limited, claims that some of its executives were wrongfully detained and brutalised by police during a contractual dispute with Nigeria’s Ogun State government.

The firm said that the mistreatment forced it to pursue the seizure of Nigerian assets abroad.

On Thursday, the media was flooded with reports of the seizure of three of Nigeria’s presidential jets, as ordered by a French court.

Two of the confiscated jets, a Dassault Falcon 7X and a Boeing 737, are part of Nigeria’s presidential air fleet, which was recently placed up for sale, while the third is an Airbus 330 that Nigeria purchased but has yet to be delivered.

The planes, which were undergoing routine maintenance, were confiscated following ex parte orders obtained by the Paris judicial court on March 7 and August 12, 2024.

An arbitral tribunal subsequently awarded Zhongshan about $74.5m in compensation, but the state government did not honour the ruling.The seizure came after litigations were initiated by the Chinese company against the Federal Government of Nigeria and the Ogun State Government due to the termination of a contractual agreement.

An arbitral panel later awarded Zhongshan around $74.5 million in compensation, but the state administration ignored the decision.

Zhongshan stated in its statement of claim to the French court that members of its Nigerian management team were physically harmed as a result of threats.

It claimed that the Ogun State Government utilised the police to beat, threaten, and wrongfully imprison its employees after the government terminated its export processing zone management contract.

The company stated, “The draconian actions of the Nigerian authorities included the Secretary to the Ogun State Government (Taiwo Adeoluwa) directly threatening Zhongfu Nigeria’s Chief Executive Officer, Dr Jianxin Han, to leave peacefully when there is an opportunity to do so, and avoid forceful removal, complications, and possible prosecution.

“As if this treatment were not appalling enough, the Nigerian authorities followed through on their threats of physical harm to the claimant’s management team in Nigeria. The police arrested the Chief Financial Officer of Zhongfu Nigeria, Mr Wenxiao Zhao, detained him without basis or explanation in terrible conditions, and physically beat him on two occasions before releasing him—without any charge—after a week in two jails.”

Meanwhile, the Ogun State Police Public Relations Office, Omolola Odutola, said the police were not involved in the matter.

She said, “It is not a police issue; we are not involved. It doesn’t have anything to do with us.”

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Musings From Abroad

World Bank doubts Ethiopia-IMF debt assessment

Published

2 days ago

December 24, 2024

Ifeoluwa Dada

Some officials of the World Bank have questioned if the study supporting Ethiopia’s debt restructuring may be “faulty” after criticising an evaluation of the country’s finances done with the International Monetary Fund (IMF).

World Bank consultant, Brian Pinto, and its head economist, Indermit Gill, evaluated the July Debt Sustainability Analysis (DSA), which was created by the IMF and employees of the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries, in an internal document seen by Reuters.

According to the authors, Ethiopia is experiencing a short-term cash shortage rather than a long-term solvency problem, which is a source of conflict between the government and holders of its $1 billion international bond that is in default, based on the DSA.

“We found that the bondholders have interpreted the DSA correctly, but the DSA itself may be faulty,” Pinto and Gill wrote in the paper from earlier this month. “The disagreements about Ethiopia’s debt sustainability will be repeated as other countries become debt distressed.”

A World Bank representative responded to a question regarding the paper by saying, “We generally don’t comment on internal deliberations between the World Bank and the IMF or any of our partner institutions.”

As part of the most recent review of the Fund’s loan program, Ethiopian State Finance Minister Eyob Tekalign told Reuters that the DSA had just been reviewed by IMF and World Bank teams and that the status had not changed significantly.

Without providing further details, an IMF representative acknowledged that its officials travelled to Ethiopia in November for the second review of the Fund’s loan program and added that every review incorporates an update to the DSA. Regarding the memo, the spokeswoman remained silent.

A request for comment from Pinto and Gill was not answered. There has been a tense confrontation between Ethiopian officials and bondholders.

The main point of contention is whether, as bondholders contend, Ethiopia is experiencing a liquidity shortage that may be resolved by rescheduling debt or if it is experiencing longer-term financial issues that necessitate haircuts, or debt write-downs.

According to the DSA, certain statistics on exports indicated pressures on both liquidity and solvency.

It was reported in October that the DSA indicated a solvency problem and that writedowns were inevitable. Investors have criticised a government proposal that suggests an 18% haircut in addition to rejecting the evaluation.

Musings From Abroad

Swiss company Mercuria partners Zambia’s IDC in new metals trading firm

Published

5 days ago

December 21, 2024

Ifeoluwa Dada

According to a statement released by Swiss commodities trader, Mercuria, on Thursday, it has established a metals trading arm with Zambia, the second-largest producer of copper in Africa.

The trading unit is jointly owned by Mercuria and an arm of Zambia’s Industrial Development Company (IDC), and its purpose is to allow Zambia to engage directly in the minerals trading market.

The joint venture “envisages the establishment of a vehicle to market and trade Zambian copper by mutual leverage,” according to a statement from Cornwell Muleya, the CEO of IDC.

The southern African nation wants to increase copper output to roughly 3 million metric tonnes within the next ten years, and in 2023, it produced roughly 698,000 tonnes of copper, down from 763,000 metric tonnes the year before.

In June, the Zambian government announced that it would establish a minerals trading unit.

Investors including First Quantum Minerals and Barrick Gold are ramping up production, with output set to receive a further boost once Vedanta Resources’ Konkola Copper Mines restart activity.

“Our joint venture with IDC marks a significant milestone for Zambia as it positions itself more strategically in the global minerals market,” Kostas Bintas, Mercuria’s global head of metals and minerals, said in the statement.