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Fiscal corruption in governance and the 1999 Constitution as amended

Published by Guardian on Tue, 20 Dec 2011


NIGERIANS are still holding their breath over the threat by the Federal Government to remove the subsidy on petroleum products next year.The government of the federation has hinted that it would use the money on subsidy removal to build infrastructure across the country, but Nigerians have refused to be lured into the open Bermuda triangle.It is only in Nigeria that fiscal corruption goes by other names. While the heated debate on this is yet to die down, government decided to create a special account called the Sovereign Wealth Fund (SWF) through which government may carry out special projects and cushion immediate financial crisis or such other crisis not envisaged by the yearly budget.The Constitution did not envisage a situation where the government of the federation would maintain any special account except as prescribed by section 162(1), which states that ' the Federation shall maintain a special account to be called ' the Federation Account' into which shall be paid all revenue collected by the Government of the Federation''Before now, all kinds of special accounts have been created by the government as a conduit to fret away funds to service the personal interest of the cartel in power.So far, the National Assembly has not stopped appropriating funds to itself by fixing members' salaries and allowances against the spirit of the constitution. Court action is still pending at the Supreme Court over the creation of the Excess Crude Account (ECA) by the Olusegun Obasanjo government.Government claimed that the account is maintained by the excess accruing to the Federal Government from crude oil sales. Expenditure from such account is merely treated like security votes, which nobody has the constitutional right to ask for proper management and account. But should it be so' Not quite.The fact is that the ECA, SWF or whatsoever acronym given to it is illegal, unconstitutional and offends the principles of fiscal responsibility.The last stroke that may break the camel's back is the eventuality of removing the subsidy on petroleum products next year. Government claims that it can no longer fund the subsidy on imported refined crude. Why would Nigeria continue to import fuel when she is the sixth largest crude exporting country' Why can't we have functioning refineries with the Excess from crude oil sales which government is saving (') in the Excess Crude Account' The answers to these questions can only be traced to corruption.Because the citizens are docile, government seems to be mortgaging the collective aspirations of Nigerians on good governance to uneven economic policies that are meant to swell the pockets of these corrupt few in government and their hangers-on and impoverish Nigerians the more.I make bold to say that Nigerians have no reason to buy PMS at more than N20 per litre. And there is no reason why Nigerians should not have at least six functional refineries. We can achieve all these but corruption has bugged the country down for too long. While the debate ranges on, I make bold to ask the question whether subsidy as government claimed actually exist' I have my doubt.One of the grouse of the governors against the Federal Government is that the latter has depleted the fund in the Excess Crude Account while the case is still pending before the Supreme Court. The governors insist that the central government has utilized funds in this account to service the subsidy on petroleum products.If this is the case, then subsidy is only a figment of the imagination of the person who says there is subsidy. In A.G Federation V. A.G Abia State & 35 others (2003) 4 NWLR (PT. 809) 124 at 177, the Supreme Court held that deducting money at source from the Federation Account to service any debt or any expenditure without first sharing same among the states according to the derivation formula of the Revenue Mobilization and Fiscal Commission is illegal and unconstitutional. In other words, the Federal Government can only service its debt or incur any expenditure only from the balance standing to its credit from the Federation Account after the sharing formula has been complied with.The Federal Government has been short changing the states and local councils by deducting money at source for the importation of petroleum products and for the over hyped subsidy. What this translates to is that subsidy does not exist whatsoever. Rather Nigerians have been paying the full price for what they consume! To buttress this point the more, we shall cast our mind back to the case of A.G Bendel State V. A.G Federation (1984) 5 NCLR 101 where the National Assembly pursuant to section 149 (1) of the 1979 Constitution (similar to S. 162 (1) of the 1999 constitution as amended) enacted the Allocation of Revenue (Federation Account etc) Act by which in section 2it gave 35 per cent each to all states of the federation from the Federation Account and by the same legislation deducted 1per cent from this amount to be paid into a fund to be administered by the Federal Government for the amelioration of ecological problems in any part of Nigeria.The Plaintiff (Bendel State) called this a fraud and instituted an action against the FederalGovernment. The Supreme Court declared section 2 and other sections of the Act illegal and unconstitutional. The court held that ' since the position of the Federal Government in maintaining the Federation Account is by virtue of section 149(1) of the 1979 Constitution that of a Trustee for the State Government and the Local Councils of the states, it is the duty of the Federation Government to keep a proper account of the trust it administers and the states as beneficiaries have a right to call upon it for accurate information as to the state of the trust. Consequently, the Federal Government must render accurate and regular account to the beneficiaries of all monies paid into the Federation Account when requested to do so.'We can glean from here that the penchant of the federal government in connivance with the National Assembly to steal Allocation of the States and local government councils has a long- standing history. The federal government has no power under the constitution to create any special account from monies that should be paid into the Federation Account.What the government has been doing in the name of subsidizing petroleum products is to rob Peter to pay Paul. It robs the states and local councils to pay for the importation of fuel. The Excess Crude Account is illegal. The Federal Government as the Supreme Court has stated in A.G Bendel State V. A.G Federation (supra) must give a proper and accurate account of how much it has spend so far from this account and on what apart from using it for importation of fuel. Believe it or not, Petroleum Subsidy Does Not Exist!' Elemuo is a Port Harcourt-based legal practitioner.
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