Nigeria’s Debt to China in Focus as Chinese Firm Seizes FG’s Assets Globally, Nigerians React
- Nigerians are fidgeting over the recently seized presidential jets by a French court due to a debt to a Chinese firm
- The court ordered the seizure of three presidential jets over the failure of Ogun State to pay a judgment debt of $74.5 debt
- Nigerians say the seizure is a sign of what could happen to Nigeria if it fails to repay its debt to China
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Federal Government of Nigeria is facing international embarrassment. A French court has seized three presidential jets following a legal dispute with a Chinese company, Zhongshan Fucheng Industrial Investment Co. Limited.
The seizure is linked to a contract dispute with the Ogun state government, which terminated a contract with Zhongshan in 2016 and failed to pay the $74.5 million awarded by an arbitral tribunal.
Source: Getty Images
Public outrage over asset seizure
The Chinese firm has also obtained an order from a U.S. appeals court to seize other Nigerian assets abroad. The Nigerian government has accused Zhongshan of fraud and fraudulent attempts to strip the country of its assets.
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The incident has sparked criticism from various quarters, including political figures and the public. It highlights concerns over handling international contracts and the potential impact on Nigeria's diplomatic relations and national image.
Nigerians have expressed concern over the debts owed to China by the Nigerian government.
Nigeria owes China $5 billion
According to the Debt Management Office (DMO), Nigeria is indebted to China to $5.04 billion as of March 31, 2024.
The seizure of Nigeria’s assets has raised the debt owed to the Asian giant, with many saying that the country may suffer the same fate if it fails to service its debts.
The presidential candidate of the Labour Party called the news a national embarrassment, saying that the development has exposed the government's failure and Nigeria’s attitude to the rule of law.
Nigerians react to seizure of Nigeria's assets
Other Nigerians said the country’s assets are unsafe, considering the size of its debt to China.
An X user, @MissPearls, said:
So, Ogun State Govt is owing a Chinese company, Zhongshan, $74.5M and has been evading payment
Now, a French Court has given an order that 3 Presidential jets (2 earlier put up for sale and the new one recently purchased)
All be seized until Ogun State pays up!
Wonderful!
Another user said:
And that's not all. A court in England ordered a property in Liverpool belonging to the FG to cease for the same issue.
A third user said:
They should already sell it and pay the loan. The Nigerian government can deduct it from Ogun State's monthly allocation.
Legit.ng earlier reported that three Nigeria-owned jets linked to the presidential jets fleet have been reportedly seized in France and Switzerland due to an ongoing dispute between Ogun state and Chinese company Zhongshan.
The seizures followed a ruling by a French court, which authorised the aircraft confiscation.
Leadership reports that the legal battle stems from a 2010 agreement in which Zhongshan, through its parent company Zhuhai Zhongfu Industrial Group Co. Ltd, secured rights to develop a free trade zone in Ogun state, Nigeria.
In 2011, Zhongshan established a Nigerian entity, Zhongfu International Investment (NIG) FZE, to manage the project under the authority of the Ogun State government.
However, tensions escalated in July 2016 when Zhongfu accused the state government of abruptly terminating its appointment and attempting to install a new manager for the free trade zone.
The dispute led to Zhongfu initiating an investment treaty arbitration under the bilateral investment treaty between China and Nigeria (the China-Nigeria BIT) in 2016.
List of countries Chinese firm is targeting Nigeria's assets
Legit.ng earlier reported that the Chinese firm Zhongshan Fucheng Industrial Investment Co. Limited, which secured a court order to ground three of the federal government's presidential jets, was reportedly plotting to get similar court injunctions in eight other countries.
It was learnt that the Chinese firm has commenced a legal move in at least eight global jurisdictions over the dispute between it and the Ogun state government.
Reports say some countries where Zhongshan has initiated legal actions to seize federal government assets are the United Kingdom, the United States of America, Canada, Belgium, Singapore, France, and the British Virgin Islands.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
