Controversy around Pakistani anti-graft body thickens as new law challenged in high court

A flock of birds fly over the Lahore High Court in this undated file photo. (Photo courtesy: social media)
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Updated 10 October 2021
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Controversy around Pakistani anti-graft body thickens as new law challenged in high court

  • Petition filed in Lahore court says changing law to accommodate one individual “illegal, mala fide, and unconstitutional”
  • Opposition’s biggest contention is that ordinance paves way for incumbent NAB Chairman to continue holding post

ISLAMABAD: An ordinance signed by the Pakistani president this week to curtail the jurisdiction of the country’s anti-corruption watchdog by excluding key government entities from the ambit of investigations and enabling the president to reappoint the body’s chief or extend their tenure has been challenged in the Lahore High Court, local media reported on Sunday.

The government and the opposition in Pakistan have been at loggerheads in recent weeks over the legislation which allows key changes in the National Accountability Bureau (NAB). The opposition says the amendments will allow the government to use NAB to go after political opponents.

The opposition’s biggest contention is that the ordinance paves the way for incumbent NAB Chairman Justice (retd) Javed Iqbal to continue holding his post until the appointment of his successor.

A petition filed in the Lahore High Court on Saturday said changing the law to accommodate or benefit a single individual was “patently illegal, mala fide, and unconstitutional.”

In Pakistan, an ordinance is a law promulgated by the president, when parliament is not in session, in exercise of the powers vested in him by Article 89 of the Constitution, for a limited time only.

“An ordinance cannot be allowed to override the parliament since assembly is there, and a session can be called at any time,” the petitioner’s counsel, Ishtiaq A. Chaudhary, said.

“Any attempt to subvert, bypass or nullify the effect of any provision of the constitution by parliament or the executive is liable to be struck down by this court which being the custodian of the constitutional mandate to interpret the Constitution.”

The lawyer contended that the recent amendment was “a mockery of parliament.”

He asked the court that the writ petition be accepted on the ground that the amendment made to the NAB ordinance was “person-specific,” referring to the current NAB chief, and promulgated to favor a single individual.

As per the new ordinance, signed on Wednesday, its provision will not be applicable to the following persons or transactions:

“All matters pertaining to Federal, Provincial or Local taxation, other levies or imposts, including concealments, refunds, criminality, criminal intention or loss of exchequer pertaining to taxation; decisions of Federal or Provincial Cabinet, their Committees or Sub-Committees, Council of Common Interests (CCI), National Economic Council (NEC), National Finance Commission (NFC), Executive Committee of the National Economic Council (ECNEC), Central Development Working Party (CDWP), Provincial Development Working Party (PDWP) and Departmental Development Working Party (DDWP), or decisions of the Boards of the State Bank of Pakistan,” a copy of the document seen by Arab News says.

The ordinance’s provisions will also not apply to any “person or entity, which are not directly or indirectly connected with the holder of a public office; procedural lapses in any public or governmental work, project or scheme, unless it is shown that a holder of public office or any other person has been conferred or has received any monetary or other material benefit from that particular public or governmental work, whether directly or indirectly on account of such procedural lapses, which the said recipient was otherwise not entitled to receive; an advice, report or opinion rendered or given by a public office holder or any other person in the course of his duty, unless there is sufficient evidence to show that the holder of public office or any other person received or gained any monetary or other material benefit, whether directly or indirectly, on account of such advise, opinion or report, which the said recipient was otherwise not entitled to receive.”

To grant extension in the tenure of the NAB chairman, sub-section b of Section 6 of the National Accountability Ordinance (NAO) has been amended by excluding the word “non-extendable” from the statute.

The amended ordinance has retained the provision that requires consultation between the opposition leader and the leader of the house in the National Assembly for the appointment of the NAB chairman. But the section states that the president would consult both of them.

“There shall be a Chairman, National Accountability Bureau to be appointed by the President in consultation with the Leader of the House and the Leader of the Opposition in the National Assembly. The Chairman shall hold office for a period of four years on such terms and conditions as may be determined by the President and shall not be removed from office except on grounds provided for the removal of a Judge of Supreme Court in the manner and by the forum provided under Article 209 of the Constitution of Pakistan,” the document reads.

“Provided that on expiry of the period of four years, the incumbent Chairman may be appointed for another period of four years by the President...”

The ordinance has enhanced the authority of the NAB prosecutor general, empowering him to play a crucial role in advising the chairman to file or withdraw any reference from a court. 

It has also allowed the accountability court to grant bail to any accused. Under the NAB law previously, there was no provision of granting bail to the accused as an under-custody suspect could only apply for bail after the expiry of his 90-day remand and that too under the extraordinary jurisdiction of the high court, under Article 199 of the Constitution of Pakistan, which empowers the court to enforce fundamental rights.

The ordinance also allows the appointment of retired judges of high courts as accountability judges. In addition, it provides that a district and sessions judge and an additional district and sessions judge may also be designated as the judge of an accountability court with the consent of the chief justice of the concerned high court.


Islamabad dismisses claims about paying up to 8 percent interest on foreign loans as ‘misleading’

Updated 22 February 2026
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Islamabad dismisses claims about paying up to 8 percent interest on foreign loans as ‘misleading’

  • Pakistan has long relied on external loans to help bridge persistent gaps in public finances and foreign exchange reserves
  • Pakistan’s total external debt, liabilities stand at $138 billion at an overall average cost of around 4 percent, ministry says

KARACHI: Pakistan’s finance ministry on Sunday dismissed as “misleading” claims that the country is paying up to 8 percent interest on external loans, saying the overall average cost of external public debt is approximately 4 percent.

Pakistan has long relied on external loans to help bridge persistent gaps in public finances and foreign exchange reserves, driven largely by a narrow tax base, chronic trade deficits, rising debt-servicing costs and repeated balance-of-payments pressures.

Over the decades, successive governments have turned to multilateral and bilateral lenders, including the International Monetary Fund, the World Bank and the Asian Development Bank, to support budgetary needs and shore up foreign exchange reserves.

The finance ministry on Sunday issued a clarification in response to a “recent press commentary” regarding the country’s external debt position and associated interest payments, and said the figures required contextual explanation to ensure accurate understanding of Pakistan’s external debt profile.

“Pakistan’s total external debt and liabilities currently stand at $138 billion. This figure, however, encompasses a broad range of obligations, including public and publicly guaranteed debt, debt of Public Sector Enterprises (both guaranteed and non-guaranteed), bank borrowings, private-sector external debt, and intercompany liabilities to direct investors. It is therefore important to distinguish this aggregate figure from External Public (Government) Debt, which amounts to approximately $92 billion,” it said.

“Of the total External Public Debt, nearly 75 percent comprises concessional and long-term financing obtained from multilateral institutions (excluding the IMF) and bilateral development partners. Only about 7 percent of this debt consists of commercial loans, while another 7 percent relates to long-term Eurobonds. In light of this composition, the claim that Pakistan is paying interest on external loans ‘up to 8 percent’ is misleading.

The overall average cost of External Public Debt is approximately 4 percent, reflecting the predominantly concessional nature of the borrowing portfolio.”

With respect to interest payments, public external debt interest outflows increased from $1.99 billion in Fiscal Year (FY) 2022 to $3.59 billion in FY2025, representing an increase of 80.4 percent, not 84 percent as reported. In absolute terms, interest payments rose by $1.60 billion over this period, not $1.67 billion, it said.

According to the State Bank of Pakistan’s records, Pakistan’s total debt servicing payments to specific creditors during the period under reference were as follows: the IMF received $1.50 billion, of which $580 million constituted interest; Naya Pakistan Certificates payments totaled $1.56 billion, including $94 million in interest; the Asian Development Bank received $1.54 billion, including $615 million in interest; the World Bank received $1.25 billion, including $419 million in interest; and external commercial loans amounted to nearly $3 billion, of which $327 million represented interest payments.

“While interest payments have increased in absolute terms, this rise cannot be attributed solely to an expansion in the debt stock,” the ministry said. “Although the overall debt stock has increased slightly since FY2022, the additional inflows have primarily originated from concessional multilateral sources and the IMF’s Extended Fund Facility (EFF) under the ongoing IMF-supported program.”

Pakistan secured a $7 billion IMF bailout in Sept. 2024 as part of Prime Minister Shehbaz Sharif’s efforts to stabilize the South Asian economy that narrowly averted a default in 2023. The government has since been making efforts to boost trade and bring in foreign investment to consolidate recovery.

“It is also important to note that the increase in interest payments reflects prevailing global interest rate dynamics. In response to the inflation surge of 2021–22, the US Federal Reserve raised the federal funds rate from 0.75-1.00 percent in May 2022 to 5.25–5.50 percent by July 2023. Although rates have since moderated to around 3.75 percent, they remain significantly higher than 2022 levels,” the finance ministry said.

“The government remains committed to prudent debt management, transparency, and the continued strengthening of Pakistan’s macroeconomic stability,” it added.