AGF Malami Defends Planned Payment Of Hundreds Of Billions Of Naira To Debt Recovery Agent

The Attorney-General of the Federation and Minister of Justice,
Abubakar Malami, has defended the decision of his office to approve
payment of five per cent of recovered sums as commission to an
international company, Trobell Limited.

The contract is in respect of the government’s effort to recover
over $62 billion the government said some multinational oil
companies owe Nigeria.

The debt claim arose from unremitted funds from the production
sharing contracts (PSCs) signed between Nigeria and oil
multinationals.

President Muhammadu Buhari had expressed consternation over the
contract with Trobell Limited and directed the minister to suspend
the contract, describing the agreed commission as excessive. The
president, in a letter by his Chief of Staff, Abba Kyari, as
reported by The Cable newspaper, had stressed that the government
does not need the help of the company to recover the debt as the
Supreme Court had already directed the companies to pay up.

But in a statement sent to journalists by his aide, Umar Gwandu,
the minister defended the debt recovery contract, saying the five
per cent commission was a fraction of what was offered by previous
administrations.

Mr Malami cited the example of the administration of a former
president, Goodluck Jonathan, which it said paid a 30 per cent
commission for similar recoveries.

Prior to the signing of the Deep Offshore and Inland Basin
production sharing contract (PSC) Act by President Buhari on
November 4, Mr Malami had moved to recover shares from oil revenues
due to Nigeria from international oil companies.

As part of the effort, Mr Malami approved a request by Trobell
Limited in 2018 to proceed with the requirements for the recovery
of the funds at a cost of five per cent of the recovered sum, once
the legal framework was set by the signing of the Act.

But in the letter from the Chief of Staff, Abba Kyari, the
president described the five per cent cost of recovery as
unnecessary and added that the Supreme Court had instructed the
multinational companies to make the said payments following a suit
by three oil producing states of Rivers, Cross River and
Bayelsa.

The presidency described as “incredible” the requested recovery
cost, which amounts to $2.15 billion or N774 billion — at the
initial estimate of $43 billion,” the Cable reported.

However, in his reply to the presidency’s directive, Mr Malami
said the federal government should focus rather on the amount that
would accrue to Nigeria from the unpaid arrears and understand that
the immediate past administration of President Goodluck Jonathan
paid as high as 30 per cent for similar recoveries.

Mr Malami was also quoted as saying “the volume of the fees
payable to the recovery agents which in all cases is contingent
upon recovery, has never been a subject of executive contention in
this matter.”

The minister said the total amount accrued to Nigeria from the
unremitted fund was $62,190, 679,793.00 and described as
unreasonable and illogical a decision by the government to forgo
the recovery process because of the payment of five per cent
commission.

“It does not accord with reason and logic for the federal
government of Nigeria to overlook, forgo and condone loss of $64
billion on account of mere five per cent fee payable upon
recovery.

“When you convert $62, 190,679, 793 billion dollars into naira
it will give you an amount more than 20 trillion naira.”

Mr Malami said the decision to pay five per cent was an
innovation, which should not be jettisoned over an unrelated
estimate made by the president in comparing the expected recovery
cost to the budget of Lagos State.

“The five per cent as a recovery fee is a product of innovation
introduced by the Federal Government upon the assumption of office
of President Muhammadu Buhari as against 30 per cent and above
which was the traditional fee by the previous administration.”