The report that Nigeria has paid the United States of America $496 million for the delivery of 12 Super Tucano Fighter Jets and other weaponry has been received with much debate over the approval of the funds without following due processes. So much debate, some members of the Senate have called for the impeachment of the President.
The US had already approved the sale of the fighter jets to Nigeria, last August, after it was initially suspended under former President Barack Obama, following a friendly-fire bombing of Internally Displaced Persons (IDPs) Camp, in Borno States.
According to a senior official of the U.S. Department of State, the jets are expected to be delivered by 2020, and “the conversation began during the previous administration’ but the planes had not been fully built.”
Director, Public Relations and Information at the Nigeria Air Force (NAF), Olatokunbo Adesanya, also confirmed the development, saying “Fighter jets and aircraft are not picked off the shelf”, but are rather manufactured after the two parties have concluded investigations.
“It could take more than a year for the jets to be delivered to Nigeria.”
This report has prompted major opposition party (PDP) to issue a Statement calling for the sanction of President Muhammadu Buhari by the National Assembly for withdrawing and spending money on the procurement of the jets, without following legal protocols.
According to the Party’s Publicity Secretary, Kola Ologbodiyan, the President’s side-lining of the National Assembly is intentional. He also accused the President of suspending the 1999 Constitution, which amounts to misconduct and betrayal of trust, in a bid to push is personal agenda. The party noted that while Section 80 (3) states that
“no moneys shall be withdrawn from any public fund of the federation, other than the Consolidated Revenue Fund of the federation, unless the issue of those moneys has been authorised by an Act of the National Assembly”,
Section 80 (4) provides that
“no moneys shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the federation, except in the manner prescribed by the National Assembly.”
“The resort to falsehood, deception and secrecy in the withdrawal from the ECA and the reported $469 million payment for the military aircraft raises very serious issues regarding the integrity of the Buhari presidency.”
The Party also called on US President Donald Trump to take note of the fact that the money paid for the fighter jets “forms part of proceed for illegal activities of our President, who has violated statutory provisions of our constitution to pursue a selfish agenda.”
The debate has now shifted to the legality of the ECA and the necessity of the approval of the National Assembly.
What is the ECA?
The Excess Crude Account was established under former President Olusegun Obasanjo’s administration in 2004, without any consultation with either the National Assembly or the 36 State Governors of the Federation.
The account was used to save oil revenues above a base amount derived from a defined oil benchmark price and with the primary objective of protecting planned budgets against shortfalls due to volatility in crude oil prices.
Since then, there has been a raging controversy between the FG and the 36 SGs over the constitutionality of the ECA.
In 2008, the Governors went to court to compel the FG to stop operating the ECA and to transfer the funds in it to the Federation Account (FA) for sharing among the three tiers of Government.
In 2011, with the suit yet to be resolved between the Federal Government and the State Governors, the Executive established another account called Sovereign Wealth Fund (SWF), to replace the ECA.
It went further to withdraw $1billion from the ECA as seed money for the newly established SWF and also established the management of the Fund known as Nigeria Sovereign Investment Authority (NSIA).
With the establishment of the SWF, the State Governors returned to Court to seek an order that would stop the Federal Government from withdrawing from the ECA.
The Government then decided to enter its defence in the case but when it appeared before the Court, it pleaded Out-of-Court settlement with the State Governors.
It posited that there was no need to litigate on issues of law that were clear and unambiguous; stressing that out-of-court settlement was the best option.
In 2013, $1billion was disbursed to the State Governors from the ECA to enable them execute State oriented projects.
It should be noted that as at when the money was approved, the States and the Federal Government were yet to reach a settlement and the ECA still operated alongside the SWF.
The Governors had then demanded for the release of the funds, pending the court case instituted against the Federal Government over the operation of the account.
Several attempts at an out-of-court settlement by the Federal Government have failed to appease the governors, who described the deductions made by the Federal Government on the account as illegal.
By mid-2015, despite its alleged illegality, the Federal Government and the 36 State Governors had shared a total of N6.21 trillion from the Excess Crude Account all without the intervention or intrusion of the National Assembly.
According to the report by the then Minister of Finance, Ngozi Okonjo-Iweala, FG received N3.29 trillion while the State Governors received N2.92 trillion I total.
Earlier in 2015, the Federal Government was reported to have taken $2billion from the ECA which was used to pay oil marketers as part of outstanding PMS subsidy debt, saying it was approved by the Federal Account Allocation Committee (FAAC)
This generated controversies, as the Finance Commissioners of the 36 States of the Federation denied approving the withdrawal.
In a Statement they said “We wish to state unequivocally that the FAAC does not have the authority to approve withdrawals from the ECA and therefore could not have approved the withdrawal of the sum of $2 billion from the Excess Crude (Foreign) Account.
“According to the law setting up the FAAC, which pre-dates the ECA, it cannot approve withdrawal and has not done so in the past. If anything, the FAAC, as records of it meetings indicate, had often queried the activities on the ECA, and therefore did not decide any withdrawal.”
In 2017, Senate called for the abolishment of the ECA, which they claimed is illegal and mismanaged.
The resolution followed a motion sponsored by Rose Oko (PDP, Cross River) and 44 others, tagged: “The Excess
Crude Account: an illegality and a drain pipe”.
Oko had described the ECA as alien to the 1999 constitution as amended or any known law in the country.
“For instance, it was reported that the ECA increased from $5.16 billion in 2005 to over $20billion in 2008, and decreased to less than $4billion by 2010 with no known tracking of its operations. In 2013, it was purported that $5billion was missing from the ECA, and that $2billion was withdrawn without authorization.
“These accusations between tiers of government portray a financial system that is flawed and without probity. By May 2017, Government announced a resumption of payment into the ECA of $87million ostensibly since May, 2015 arbitrarily. However, between May, 2015 and August, 2017 about $122.2million had accrued and ought to have been paid to the ECA.”
The Recognized Account
According to Section 162 of the 1999 Constitution (Amended):
The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory,Abuja.
The President, upon the receipt of advice from the Revenue Mobilisation Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles especially those of population, equality of States, internal revenue generation, land mass, terrain as well as population density; Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen per cent of the revenue accruing to the Federation Account directly from any natural resources.
Any amount standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the local government councils in each State on such terms and in such manner as may be prescribed by the National Assembly.
This means that the Constitution only recognised “The Federation Account” in which any money being distributed must be approved by the National Assembly.
Section 80, sub-section 1-4 also stated this about how funds would be disbursed.
All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.
No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of section 81 of this Constitution.
No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly.
No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.
This means that the money that would be withdrawn from the Revenue Fund or any other fund of the Federation must be approved by the National Assembly.
Some social commentators have argued that since the ECA is part of the public fund of the Federation, withdrawal from it should follow due process.
Others posit that the foundation and existence of ECA is already illegal, which means it is not recognised by the Constitution, so its activities does not concern the National Assembly, but is a matter of precedence. This precedence is was on display when the former Minister of Finance, Dr. Okonjo-Iweala said on December 18, 2014, in response to then Governor Oshiomole’s claim of missing money from ECA
“…Anyone who is familiar with the FAAC process would know that it does not work that way. The meetings are held every month and commissioners of finance and other officials represent their states and agreements are reached on issues including the distribution of proceeds from the account.”
This is despite the FAAC’s position that it never approves withdrawals.
The National Assembly may have to contend with the question of why it wants to approve funding from an account it had declared illegal, just as the Administration, which came to power on the music of change, will contend with making Nigerians understand why it is keeping an account many, including a the Senate dominated by the ruling part, consider illegal.
