Nigeria presents new evidence in P&ID case

Nigeria has stepped up its efforts to overturn an arbitration award worth almost $10 billion in favor of Process & Industrial Developments (P&ID). The country's lawyers presented new evidence to an online court, revealing payments from companies associated with P&ID to Vera Taiga, the daughter of the chief lawyer for Nigeria's Petroleum Ministry at the time. Sam Chidoka, the Managing Director and CEO of Kairos Capital, shared his insights on this development and other pressing issues in Nigeria during an interview on CNBC Africa. Chidoka highlighted the financial constraints faced by Nigeria, emphasizing the challenging position of not having $10 billion to settle the arbitration award. In 2015, Nigeria had reached an out-of-court settlement, paying $815 million to P&ID. With hindsight, Chidoka suggested that accepting the settlement might have been a wiser move then. However, the current economic landscape, compounded by the COVID-19 pandemic, further complicates Nigeria's financial outlook. Chidoka pointed out that the pandemic has impacted global GDP, affecting economies worldwide, including Nigeria. The country's foreign reserves, totaling around $33 billion, are strained, especially considering they are not entirely in cash. The drop in oil prices further adds to Nigeria's financial challenges, making it increasingly difficult to meet the $10 billion arbitration award. Reflecting on the P&ID case, Chidoka criticized Nigeria's handling of the situation, from signing the contract in 2010 to the delayed response in remedying the issue, leading to the current predicament. The impact of COVID-19 on the global economy, particularly in the West African region, has been stark. Projections suggest that millions of Africans, including Nigerians, could slip below the poverty line due to the economic repercussions of the pandemic. The delay in releasing updated job figures further compounds Nigeria's economic uncertainties. The last employment data from the third quarter of 2018 displayed alarming levels of unemployment, which are expected to have worsened with the ongoing crisis. Chidoka underscored the significance of timely and accurate statistics for effective planning and decision-making, stressing the need for adequate funding for agencies like the Nigerian Bureau of Statistics (NBS) to provide essential data. Addressing the issue of job preservation and local production, Chidoka expressed concerns over the Central Bank of Nigeria's decision to halt forex allocations for maize imports. While acknowledging the importance of promoting local production, Chidoka cautioned against sudden policy changes that could lead to unintended consequences. Highlighting the significant gap between maize production and consumption in Nigeria, he warned that restricting forex for maize imports could drive up prices, contributing to food inflation that is already above 15%. Chidoka suggested a phased approach to the policy implementation to mitigate adverse effects on the economy. The legal battle over the P&ID case underscores Nigeria's ongoing challenges in navigating complex financial and legal matters amid the backdrop of a global pandemic. As the country strives to avert a multi-billion dollar arbitration award, it faces a delicate balancing act to protect its economic interests and secure a favorable outcome in the protracted legal dispute.