Activist Madubuachi Idam has urged the National Assembly to enact legislation that would more rigorously regulate international debt incurred by Nigerian states.
His call comes in response to the recent seizure of Nigeria’s presidential jets in France by a Chinese company, a development that Idam describes as a significant warning for the nation’s lawmakers to take immediate and decisive action.
The incident that sparked this plea involved the Chinese firm Zhongshan Fucheng Industrial Investment Co. Limited, which successfully petitioned a French court to seize several Nigerian presidential jets.
These aircraft were undergoing routine maintenance in France when the court granted the company the right to seize them as collateral for an unresolved debt dispute with the Ogun State government.
The dispute centres around a $74.5 million award that the state government failed to honour, leading Zhongshan to take drastic measures to recover the debt.
This episode has not only embarrassed the Nigerian government on the international stage but also raised serious concerns about the vulnerability of the country’s assets abroad.
In response, the Presidency issued a statement acknowledging the seizure and criticising Zhongshan’s actions as an attempt to use underhanded tactics to claim Nigeria’s offshore assets.
However, the government also emphasised that it is not directly liable in this matter, as the dispute is between the Ogun State government and the Chinese company.
For Idam, the incident is more than just an embarrassment; it is a wake-up call for the nation. Speaking with Journalists, the activist argued that the National Assembly must urgently draft legislation to prevent such situations from recurring.
According to Idam, the current lack of regulation around international debt obligations at the state level poses a significant risk to Nigeria’s sovereignty and financial stability.
“The National Assembly must consider this obvious international embarrassment as an eye-opener and quickly fashion legislation that will aim at regulating every international debt owed by states in Nigeria, whether arising from simple contracts or international loans,” Idam stated.
He stressed that any such legislation should include provisions that allow the federal government to intervene in cases where state governments fail to meet their international debt obligations.
Idam suggested that one way to mitigate the risk of international debt defaults is to tie the repayment of such debts to the monthly federal allocations received by the states.
By doing so, the federal government would have a mechanism to ensure that state debts are serviced regularly, thereby avoiding situations where foreign creditors might seek to seize national assets.
He also proposed that the legislation should include a cap on the amount of international debt that any state can incur, specifically linking this cap to the state’s monthly federal allocation.
“The legislation must not only regulate international debts owed by state governments in Nigeria but also ensure that there is security executed in favour of the federal government.
This would enable the federal government to liquidate such debt in situations like this to save face or, better still, tie such debt to the monthly allocation payable to the state,” Idam explained.
He further insisted that “no state must be allowed to once again bring shame to the federal government.”
Idam’s call for legislative reform is rooted in the belief that stronger oversight and regulation are essential to safeguarding Nigeria’s international reputation and financial integrity.
The recent seizure of presidential jets, he argued, highlights the potential consequences of leaving state-level debt obligations unchecked.
Without proper regulation, he warned, Nigeria could face further humiliations and financial losses on the global stage.
In conclusion, Madubuachi Idam’s plea for legislative action is a timely and necessary response to the challenges posed by the Ogun State government’s debt dispute with Zhongshan Fucheng Industrial Investment Co. Limited.
By enacting laws that regulate international debt at the state level and empower the federal government to intervene when necessary, Nigeria can protect its assets and prevent future incidents that could undermine its sovereignty and standing in the international community.
The National Assembly now has an opportunity to turn this embarrassment into a catalyst for meaningful reform that will benefit the entire nation.
Support InfoStride News' Credible Journalism: Only credible journalism can guarantee a fair, accountable and transparent society, including democracy and government. It involves a lot of efforts and money. We need your support. Click here to Donate