Abubakar Malami, minister of justice and attorney-general of the federation, says the five percent commission to Trobell International Limited for the recovery of $62 billion debt is meager.
The minister said the commission to the company to help secure the unpaid arrears to Nigeria from the oil production sharing contracts (PSCs) with multinational companies is a new innovation as against the “30 percent” paid by the previous administration.
Source had that President Muhammadu Buhari terminated the debt recovery contract because of the “incredible” commission which amounts to $2.15 billion, or N774 billion, at the initial estimate of $43 billion.
Buhari was said to have been alarmed at the commission which is just N100 billion less than the 2019 budget of Lagos, the most economically viable state in the country.
In a letter to Malami dated October 16, Abba Kyari, Buhari’s chief of staff, said the president asked the minister to immediately “comply with Mr. President’s directives of March 4, 2019, and terminate the Recovery Contract which the Ministry of Justice had signed with Trobell International Limited regarding the purported recovery of $43.747b from the PSCs pursuant to the consent judgement of the Supreme Court of April 5, 2018”.
But responding in a statement on Tuesday, Malami said the five percent commission in the recovery of the total estimates is an “unprecedented reduction from what it used to be”.
The statement issued by Umar Gwandu, his spokesman, said: “The 5% 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% and above which was the traditional fee by the previous administration.
“The comparative basis is not the Lagos budget as the considerable parameter, but the amount due for the recovery which in the circumstance is approximately $62, 190, 679,793.00 as at December 2018.
“When you convert $62, 190,679, 793 billion dollars into naira it will give you an amount more than 20 trillion naira.”
Malami added that it is not reasonable for the federal government to forgo the loss of $62 billion “on account of meager 5% fee payable upon recovery”.
“Above all, volume of the fees payable to the recovery agents which in all cases is contingent upon recovery of has never been a subject of executive contention in this matter,” he said.