The House of Representatives has threatened to act against President Goodluck Jonathan over his unbridled borrowing which has seen Nigeria’s foreign debt reaching a new high.
Lawmakers say Mr. Jonathan will soon incur their wrath except he implements the Fiscal Responsibility Act which prescribes national debt ceiling.
Since its passage in 2007, the Act, a vital fiscal legislation that was to assist with national economic reforms, has remained unimplemented despite repeated calls by the National Assembly.
A critical component of the law, demands a debt ceiling to be introduced by the federal government as a buffer against limitless borrowings that once lay an excruciating burden on the nation’s economy before 2004.
By 2004, Nigeria’s debt burden to the Paris club at about $18 billion was forgiven with the current Finance minister, Ngozi Okonjo-Iweala, playing a leading role.
Federal debt profile has seen an upsurge under Mr. Jonathan, since taking office in 2010 and the president has come under attacks for policies that have depleted savings and borrowed more with little to show for it.
As of December 31, 2011, the nation’s external debt stood at US$ 5.7 billion, from US$ 4.5 billion in 2010 and U$ 3.9 billion in 2009, according to the Debt Management Office.
Critics have said such hefty borrowings should finance key infrastructural projects such as power station, seaport, interstate roads, rail network, but the administration has failed to point to any despite having also drawn down the nation’s foreign reserves from $600 billion to $500 million in months.
In February 2012, the president asked the federal lawmakers to endorse a fresh US$8 billion foreign credit lifeline to finance certain “pipeline projects”, a move that was sure to raise the external debt to nearly $14 billion, a new high in almost a decade.
According to the president, between 2012 and 2014, the government is to obtain up to US$7.91 billion in credit facilities from the World Bank, African Development Bank, Islamic Development Bank, Exim Bank of China and Indian credit lines.
In a resolution Tuesday, carefully crafted to evade mentioning possible measures against the president in the event of a default, the lawmakers gave Mr. Jonathan 60 days to implement the Act, and announce a debt ceiling.
“The non-implementation of section 42 of the Fiscal Responsibility Act 2007 is capable of encouraging imprudence and recklessness in government borrowings and improper utilization of borrowed funds to the detriment of our economic growth,” said Minority Leader, Femi Gbajabiamila, who sponsored the motion.
The lawmakers voted in support of an ultimatum, but declined to state what responses may be meted against the president besides threatening to “invoke and act upon necessary provisions of the law.”
Violations of the law or constitution by the president attracts impeachments.