Falana: State, Local Govts Entitled to 48% of Recovered Funds

Femi Falana

• Laments NGF’s failure to challenge FG’s arbitrariness

• Says Buhari’s economic team illegal, unconstitutional ·

• Faults NNPC for withholding $25bin from Federation Accounts
Gboyega Akinsanmi

A human rights lawyer, Mr. Femi Falana (SAN) yesterday said state and local governments are entitled to at least 47.32 percent of the stolen funds recovered from indicted public officers in line with the provisions of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Act.

Falana also noted that the decision of President Muhammadu Buhari to constitute the Presidential Economic Advisory Council (PAEC) violated Part 1 of the Third Schedule to the Constitution, which outlines the powers and responsibilities of the National Economic Council (NEC).

The rights activist similarly faulted the refusal of the Nigerian National Petroleum Corporation (NNPC) to remit $22.06 billion and N481.75 billion to the Federation Account, asking the state and local governments to challenge NNPC in court.

He challenged the authorities of the state and local governments to demand their shares of all the stolen funds recovered since 1999 during a phone conversation with THISDAY, lamenting that the management of the funds had been left completely in the hands of the apex government.

Since 1999, the federal government had recovered over $4 billion from the late tyrant, General Sani Abacha apart from $308 million the US Government had agreed to repatriate to Nigeria on conditions that the projects on which the funds would be expended would be administered by the Nigeria Sovereign Investment Authority and independently audited.

Aside the stolen fund recovered from the late tyrant, the Presidential
Advisory Council Against Corruption (PACAC) had disclosed that the anti graft agencies – EFCC and ICPC among others – had recovered a sum of over N1 trillion from the local treasury looters, which the president had directed, should be remitted to Single Treasury Account (STA).

Similarly, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed had announced that a sum of N605 billion had been recovered through the whistle blower policy of the federal government. The presidency might direct that the funds be remitted to the TSA.
Contrary to the provisions of the RMAFC Act and section 153 of the 1999 Constitution, Falana lamented that the management of the recovered loot had been left completely in the hands of officials of the federal government.

He observed that it was not in dispute that the bulk of the money stolen by indicted public officers and contractors was either taken from the Nigerian National Petroleum Corporation (NNPC), the Central Bank of Nigeria (CBN) or from money paid for the execution of government contracts
On this note, Falana argued that the recovered loots should be paid directly into the Federation Accounts and not the Single Treasury Accounts, noting that the federal government “is entitled to 52.68 percent; the state governments 26.72 percent and local government 20.6 percent.”

The rights activist lamented the decision of the Nigerian Governors’ Forum (NGF) “not to demand that the loot recovered from such persons be paid into the Federation Accounts for distribution to all tiers of government.
“All efforts made by a consortium of lawyers to persuade the Nigeria Governors Forum to demand for the share of the state and local governments in the recovered loot have proved abortive,” Falana lamented.

With the Presidential Economic Advisory Council the president constituted September 2019, the rights activist claimed that Buhari’s decision violated Part 1 of the Third Schedule to the Constitution, which he said, set up the National Economic Council (NEC) for the purpose of advising the president on the economic affairs of the federation.

Under Part of the Third Schedule, the 1999 Constitution states as follows: “The NEC shall have power to advise the President concerning the economic affairs of the Federation, and in particular on measures necessary for the coordination of the economic planning efforts or economic programme of the various Governments of the Federation.”

The NEC is one of the federal executive bodies established pursuant to Section 153 of the Constitution. As stakeholders in the national economy the 36 state governors and the Governor of the Central Bank are members of the NEC. The Vice President is the Chairperson of the NEC.

However, in contravention to this schedule, the president had dissolved the Economic Management Team (EMT), a technical body under the National Economic Council to advise the Federal Executive Council (FEC) on economic matters and set up the Presidential Economic advisory Council.

Falana, therefore, lamented that Buhari was reported to have appointed some Nigerians into another body and the body had been vested with the power to advise the president on the management of the national economy in violation of Part I of the Third Schedule to the 1999 Constitution.

The rights activist observed that the usurpation of the powers of the NEC by the PAEC “is illegal and unconstitutional. In this circumstance, the PEAC ought to be dissolved without any further delay. In the alternative, the PAEC may be constituted into a sub-committee of the NEC.”

As revealed in the report of the Nigeria Extractive Industry Transparency Initiative (NEITI), also, Falana faulted the Nigerian National Petroleum Corporation (NNPC) for withholding a sum of $22.06 billion and N481.75 billion, which according to him, should be remitted to the Federation Account for the benefits of all federating units.

He said out of the figure, a sum of $18.9 billion “represents the dividend earned from NLNG from 2004-2014. An additional sum of $3.1 billion dividend was paid from 2015-2018. Altogether, the NNPC has withheld a total sum of $25.1 billion and N481 billion from the Federation Account.”

Falana argued that the NEITI justified its position that the NNPC and its subsidiary, Nigerian Petroleum Development Company (NPDC) still owed the Federation Account more than $20 billion,” which according to him, was sufficient enough to help jump-start the national economy.

Beyond the golden opportunity for economic recovery, Falana claimed that there “is also a compelling case for deepening transparency and accountability in improving the oil sector. But the NNPC has justified the withdrawal of $2.201 billion from the Nigerian Liquefied Natural Gas (NLNG) fund on the ground that the corporation has the power and the legal backing to carry out such withdrawal.”

Relying on the provisions of the 1999 Constitution, Falana dismissed the claims of the NNPC that the 2018 Appropriation Act and the NLNG Appropriation Act provided the corporation the legal backing to withhold $25.1 billion and N481 billion from the Federation Account.

He thus argued that since the NNPC “is an agency of the federation established by law to manage the petroleum industry on behalf of the people of Nigeria it cannot spend any money earned from its operations without a money bill presented to the national assembly by the President and passed into law.”

He clarified that section 7 of the NNPC Act being relied upon by the NNPC management “has to be read subject to section 59 of the Constitution,” which stipulates requirements for the payment, issue or withdrawal from the Consolidated Revenue Fund or any other public fund of the federation.

Apart from calling for a probe of the diversion of the total sum of $18.9 billion dividend by the NNPC, the rights activist noted that the NLNG should be directed to make further payment directly to the federation account.

Falana, therefore, urged the authorities of the state and local governments “to institute a suit at the federal high court to challenge the illegal decision of the NNPC to withhold the fund payable to the federation account.”