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Governors Assemble Legal Team to Challenge SWF

04 Sep 2011

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Mr. Olisa Agbakoba (SAN)


From Chuks Okocha in Abuja and Olawale Olaleye in Lagos


Governors are not relenting in their efforts to challenge the establishment of the Sovereign Wealth Fund, a special statutory account into which the three tiers of government are meant to save excess accruals from oil sales above the budget benchmark and other excess revenues.

THISDAY gathered at the weekend that the governors, under the auspices of the Nigeria Governors’ Forum, had reached out to some lawyers to challenge the legality of the wealth fund at the Supreme Court for them.

Former President of the Nigerian Bar Association, Mr. Olisa Agbakoba (SAN), heads the legal team, whose membership for now includes Rickey Tarfa (SAN).

It was also gathered that the governors are also considering engaging the services of the incumbent NBA President, Mr. Joseph Daudu (SAN), to join the team, though THISDAY could not confirm yesterday whether the deal with him had been sealed.

The governors, at a meeting of the NGF in Abuja on August 21, presided over by their chairman, Governor Chibuike Amaechi of Rivers State, had urged the federal government to stop the operation of the SWF.

At a meeting of the National Economic Council the next day, President Goodluck Jonathan, apparently trying to dissuade the governors from their opposition to the SWF, urged them not to play politics with the economy.

One of the governors confided in THISDAY yesterday that although they were amenable to dialogue, they would not drop the legal bid except the federal government addressed their concerns over certain grey areas they have with the fund.

THISDAY had exclusively reported plans by the governors to go to court over the implementation of the SWF that came into being following the president’s assent to the National Sovereign Investment Authority Bill.



Opposition to the fund stemmed from the governors’ drive to get more funds to meet rising financial obligations, especially in implementing the Minimum Wage Act that pegs the lowest salary for workers at N18,000 per month.

Besides, the governors had argued that the operation of the SWF is in conflict with Section 162 of the 1999 Constitution which establishes the Federation Account and stipulates that all monies accruing to the federation should be paid into the account and distributed to the three tiers of government in conformity with the revenue allocation formula.

A governor said they were ready to take on the federal government over the SWF because it does not have the legal power to force them to save money as the operation of the special fund connotes.

Another governor confirmed that they would be heading to the Supreme Court soon for a final resolution on the operation of the fund, adding: “The constitution of Nigeria gives majority of the expenditure responsibilities to states as residual powers and the revenue formula as presently constituted is inadequate to cater to such constitutional provisions such as health care, education, housing, agriculture and infrastructure development.”


According to him, the operation of the fund reduces the revenue coming to the states from the Federation Account, “yet our responsibilities have not gone down. If for anything, the duties of the states keep increasing. Today, the federal government collects the lion’s share of the federal revenue.”

He said this was why the governors are agitating for an amendment to the revenue allocation formula as “the existing formula has become obsolete having been enacted in 1982 as the Revenue Allocation (Federation Accounts) Act of 1982.

“The inability of the federal government to efficiently discharge some of its constitutional responsibility results in states having to spend huge sums of money to fill the vacuum created by these lapses.


“Examples are the construction and rehabilitation of federal roads, infrastructure maintenance, power generation, etc.”

The governors also said the federal government has continued to deny states of revenue centrally collected from companies paying stamp duties and the income of members of the armed forces and police which are supposed to be fully remitted to the states of residence on the basis of derivation as provided under Section 163 (b) of the 1999 Constitution.

“The increasing responsibilities of states and local governments in such areas as education, health care, roads, construction and maintenance, drainage  and water supply, sanitation, inland water ways, town planning, justice, etc, justify an upward review of revenue allocation to the states and local governments and  is one of the reasons why we are against the fund,” the governor said.

Tags: Featured, Governors, News, Nigeria, Sovereign Wealth Fund

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  • Until we adopt fiscal federalism, these whole nonsence will not stop. No governors thinks again to generate wealth in his state again in as much as the national cake is there for them to share. They are not bothered about the future of this nation. What a shame. Without control, Nigeria will remain a failed state that it is already turning into.

    From: Wale

    Posted: 3 years ago

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  • The state government should realize that the masses are listening because,even if the federal government comply to their demand about this swf which we the masses know well that is for the benefit of the country,there will still be abandon projects just like the previous governors in some states.if the federal government really have to consider the allocation,they should also set up a more active committee to checkmate the states 4 proper utilizing the fund.thanks.

    From: Yusuf abdulrafiu

    Posted: 3 years ago

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