FEATURES: Sovereign Wealth Fund, An Administrative Terrorism

March 7, 2014

Ekiti State House of Assembly, the other day, trivialized an otherwise very serious constitutional issue by calling on the National Assembly to immediately commence impeachment proceedings against President Goodluck Jonathan. The impeachable offence cited? Compulsory deduction, at source, from the revenue allocation due to the states as contribution to an unconstitutional Sovereign Wealth Fund.

Following the resolution of Ekiti State House of Assembly, it is a matter of time for the remaining 35 state houses of assembly to sheepishly pass similar resolution.

Should that happen, all of them would have exposed their very low caliber as the people’s representatives. Otherwise, on this matter, there is as yet no impeachable offence for which Jonathan can be sanctioned. The law under which Jonathan is making the deductions unauthorized by the 36 states is before the Supreme Court in a suit filed by all state governments against the Federal Government.

In any case, who are those members of National Assembly being called upon by their Ekiti State counterparts to commence impeachment proceedings against Goodluck Jonathan? The same National Assembly members who, in the first place, ignorantly and in violation of our Federal Constitution passed the Sovereign Wealth Fund bill without realizing the implications? This is not to say that mere legislation of the bill makes it constitutional. Where such acts violate the constitution, it is the duty of law courts to interpret and that is why the state governments as the offended parties are challenging the validity of the Sovereign Wealth Fund Act.

If, however, members of the State Houses of Assembly feel so concerned about impeachment on this issue, they should start with the respective state governors who, as it seemed, all slept off while the law was being passed at Abuja. How many of the state governors know their power/authority under the constitution? Until the alarm was raised, in this column, on the illegality of the Sovereign Wealth Fund Act, not a single state governor raised any objection.

The problem starts from the palpable fear of state governors in a democracy for the President, starting from the Obasanjo era. Otherwise, the Sovereign Wealth Fund should not have taken off at all. It is still beyond ordinary understanding why state governors should be fearful and cold like rain-soaked chickens as their constitutional powers are usurped from then in the name of Sovereign Wealth Fund.

Even now, state governors are too afraid to take a stand as deliberate efforts are being made to defraud discerning Nigerians on the unconstitutionality of Sovereign Wealth Fund in a federal system of government. It is a straightforward issue. Nigeria has a federal constitution, which grants unabridged autonomy to state governments on the management of their funds from the Federation Account. Whether a state government is bankrupt or not is not the business of the Federal Government which is also not obliged by the same constitution to rescue any state from threatening or actual bankruptcy.

By the way, it is ridiculous that Ekiti House of Assembly, like other 35 states, is just waking to the administrative terrorism to which states are being subjected under the very idea of a unitary Sovereign Wealth Fund. The Boko Haram terrorism is a vivid analogy. A group of citizens commenced a self-imposed mission to force fellow citizens into Muslim religion rather than Christianity of their choice. Without constitution or consent, the fellow citizens on the receiving end are thereby traumatized and killed in worst cases. Boko Haram’s terrorism violates Nigerian constitution, which guarantees freedom of religious worship.

Such is the Sovereign Wealth Fund which violently erodes the constitutional rights of states to manage their funds as they deem fit. Obviously, to guard against imposition of an authoritarian Federal Government on the component states, every Federation, and there are only a few, clearly limits the constitutional power of a potentially overbearing Federal Government, lest the states are subjected to tyranny. That is exactly what Nigerian Federal Government has done to the states by compelling them to save for its ill-defined rainy day.

The Sovereign Wealth Fund lawless act is not an APC versus PDP matter or APGA against PDP or Labour Party betrayal of PDP. Neither is Sovereign Wealth Fund fraud a Chief Bisi Akande and/or Maxi Okwu conspiracy against President Goodluck Jonathan. After all, many of the 36 states challenging the Sovereign Wealth Fund are run not only by the PDP but also its known allies – APGA and Labour Party.

An untenable argument is that Sovereign Wealth Fund is desirable. Must Nigerian Federal Constitution, on that account, be violated?

States in Nigeria, under the constitution are not subordinates of the Federal Government, which will determine for the states, the disbursement of their funds like a colonial empire presiding over its overseas dependent territories. States in Nigeria are administratively autonomous on their revenue allocation.

Another baseless claim is that Sovereign Wealth Fund operates all over the world, Nigeria is about the only Federation in Africa and one of the very few in the world. Oil-producing countries in Africa – Algeria, Libya, Gabon, Ghana, Equitorial Guinea – operate unitary governments. It is therefore within the constitutionality of existing central (as distinct from Nigeria’s federal) governments to legislate Sovereign Wealth Fund for the entire respective country.

Accordingly, no other Federal Government in the world – United States, Canada, Germany, Australia, India or confederation like Switzerland – has Sovereign Wealth Fund on Nigeria’s pattern with the almighty federal government seizing the revenue of states under the guise of some fraudulent saving for a rainy day.

If Nigeria’s Federal Government could usurp a non-existing power to force 36 states to save for a rainy and is allowed to retain such an unconstitutional authority, the same Federal Government can in future, embark on a legislation empowering Abuja to plan and impose annual budget on each of the 36 states, all in violation of the constitution as in the Sovereign Wealth Fund.

Similarly, if the Federal Government could legislate compulsory contributions into a bogus Sovereign Wealth Fund by the 36 states, what stops the Federal Government in future in forcing the National Assembly to save for a rainy day under the Sovereign Wealth Fund? What stops the Federal Government from similarly forcing the Judiciary to save for a rainy day by deducting such forced contributions at source before releasing the allocations to the Judiciary and National Assembly?

Would these two separate arms of government then hold out their autonomy against compulsory saving? Whereas the constitution separates the functions and powers of the executive (Presidency) the Judiciary and the National Assembly, the same constitution guarantees and separates the powers of the states especially on their funds. This must be so until and unless the constitution is amended.

The United States vividly illustrates the limits of a Federal Government on Sovereign Wealth Fund. The major oil producing  state in the country is Texas, like Nigeria’s Rivers State, Delta, Bayelsa and Akwa Ibom. In strict compliance with constitution, United States never legislated a forced Sovereign Wealth Fund on the states. Texas is not United States and has not forced other states to contribute to the Sovereign Wealth Fund.

It is up to each state in Nigeria to set up its own Sovereign Wealth Fund like the Rivers State with its own Reserve Fund and when it was necessary sometime ago, Governor Amaechi obtained approval from the state legislature to withdraw from the Fund for the needs of the state.

The judiciary is part of the problem of our overbearing Federal Government. Nigerian judiciary has virtually no reputation for activism. Otherwise, why should the judiciary decide an attempt at out of court settlement for a major constitutional dispute between the 36 states challenging the authority of Federal Government? Over a year later, here we are.

Meanwhile, states are financially reeling. The claim of Ekiti State Assembly members is that the illegal deduction from their revenue allocation every month has been negatively affecting the living standard of their people and the state’s economic development. That is the common pain all the 36 states experience to form joint legal action against the Sovereign Wealth Fund.

By Duro Onabule

This article was published in The DailySun on Friday March 7, 2014

Last modified: March 7, 2014

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