By Dele Sobowale

The objective of the waiver policy, the implementation of which was reviewed and strengthened in late 2011 is to curb the abuses and inefficiencies of the previous regime…There is evidence that it is working to boost key sectors of the economy.” Federal Ministry of Finance in November 2013.

On Monday, December 2, 2013, the PUNCH published a list of recipients of N65.23 billion in the last 24 months. Shell Petroleum Development Company, collected  N16.295 or 25 percent; Niger Delta Power Holding Company, received N15.1billion or 23.2 percent. So, two entities alone were beneficiaries of 48.2 percent of the total.

Other lucky recipients included the following: Federal Ministry of Health, N4.9 billion; Rivers State Ministry of Power; N3.76 billion; Federal Ministry of Power; N4.17 billion; Geometric Power Ltd; N1.3 billion and Netco Dietsmann Company; N6.63 billion whie  Rivers State Government got  N2.08 billion.

There were a few other recipients of the largesse, but, the list presented above, and which accounted for over 85% of the waivers, raises more questions about whether the abuses had actually been curbed or made worse.

Most Nigerians would want to know what the recipients did with the funds made generously available to them. But, more importantly, the narrow geographical spread of the recipients call into question the objectivity of the Federal Ministry of Finance in granting the waivers.

The claim that “there is evidence that it is working to boost key sectors” can easily be disputed by pointing out that the waivers granted to the Niger Delta Power Holding Company had not resulted in increase in power supply to the country. Neither has the N1.2 billion granted to Geometric Power Ltd, a private company, in which the former Minister for Power, Professor Nnaji, has substantial stakes, improved the situation.

Similarly, waivers given to the Federal government and the Rivers State government cannot, by any stretch of the imagination, be considered as boosters to any sector of the economy – key or not.

Certainly, they have made no impact on manufacturing or agriculture, on food and beverage, pharmaceuticals, banking, insurance and education, as well as exports. So, where is the “evidence that it is working?” One thing however is obvious. A quick glance at the list of recipients would reveal that they were all friends of the administration.

The Minister of Petroleum Resources, as everybody knows, was an Executive Director of Shell before coming into government. The waivers granted to Rivers State preceded the current political disagreements between the state governor and the President.

The more the Federal Ministry of Finance tries to wriggle out of the charges of nepotism made against it, the more it presents evidence for its own conviction. With the exception of the N1.33 billion granted to the Cocoa Association of Nigeria and the Federal Ministry of Health, every waiver granted went to an organization in the South South or South East. The remaining four zones – North Central, North East, North West and South West — got next to nothing. Was that a true reflection of the economic activities in the country or was it deliberate distribution of our national wealth in favour of a few people in those two zones?

Apart from Duty waiver, the Federal government is still in court over the creation of the Sovereign Wealth Fund, SWF, and funding it to the tune of $1 billion. The original idea was to build up the fund gradually, over time, to serve as a cushion if in the future earnings from exports, especially crude, drop sharply.

Nigeria is not the only country maintaining SWF. And, it needs to be restated here that it is a good idea – in principle. But, like all good ideas, in principle, adoption of it by the Federal Government suffers from two major drawbacks.  First, it is doubtful if the constitution of Nigeria allows the Federal Government to deduct, upfront, from revenue that must be paid into the Federation Account and compels the states to save their money by creating the SWF.

Second, the Federal Government will manage the SWF on behalf of the states. Granted, all the 36 states are represented on the unwieldy board managing the fund, the Chief Executive is still a FederalGovernment appointee and the decisions concerning the investments to be made will be heavily influenced by FederalGovernment preferences.

Already, many people are pointing out that the Minister of Trade and Investments, Mr Segun Aganga, was a top manager of Goldman Sacks, one of the investment houses selected to manage the fund.

Goldman Sacks lately has had a spotty performance record lately and would probably not be the choice of those investing their own funds. But, the Federal Government had selected it and the states must go along while the SWF lasts.
It might not last long because the Supreme Court will soon deliver judgment on its legality.Excess Crude Account, ECA, is another “rainy day” account unilaterally created by the Federal Government. Nobody needs to be a Senior Advocate of Nigeria, SAN, to know that this account was created during the Obasanjo’ Okonjo-Iweala regime.

There is no mention of such an account in our statutes and the brazen lawlessness which the Federal Governments of Obasanjo, Yar’Adua and Jonathan, had demonstrated in retaining that account partly explains why we are regarded by foreigners as a nation of criminals. Fish rots from the head and every president as the Head of Government of the country must not only uphold the law, but must be seen to defend every part of it – not what he chooses.
The accusations and counter accusations between the Rivers State government and the Ministry of Finance had merely pointed to the need to end this illegal account this month. The Federal Government, this December, should distribute the balance in the ECA to the three tiers of government and close the account permanently. This is the sensible, legal and most honourable step to take.

With respect to both the SWF and ECA, Lagos State Governor Babatunde Fashola, SAN, voiced the concern and objections of many governors and Local Government Chairmen in the country when he asked: “Why should the Federal Government save my money for me or force me to save?” That precisely is the heart of the matter.

The President, Governors and Local Government Chairpersons had been elected by various constituencies, even if the elections were hopelessly flawed, and were charged with financial responsibilities at each level.

In a federal democracy, no external power should intrude in the way and manner those responsibilities are discharged. By, seizing some of the funds belonging to states and the local governments, the Federal government is actually intruding in the affairs of the states.

That, the intervention might be well-intentioned cannot excuse the fact that it is unconstitutional and should stop.
Underlying the steps taken by the Federal Government, when the ECA was created, was the assumption that the Federal Government is a better manager and custodian of the funds than the states.

By allowing the ECA to stand for so long, the States and LGs invited the creation of the SWF which is now being contested in court. A lot of people in government at State and LG level probably never heard of the old adage: “A stitch in time saves nine”.

If ECA had been resisted, when it was first imposed, we would not have SWF to fight about today. All governments, if not checked, are empire builders; give them one inch, they will take a yard; allow them ECA, SWF follows. If not stopped now, another illegal account will soon emerge. Mark my words.

However, if the looting of the pension funds, the Petroleum Development Trust Fund, the Fuel Subsidy, the Police Fund etc demonstrate the Federal Government’s efficiency at managing funds, then, the sooner the states and LGs take back their funds the better. Federal public servants, elected and appointed, seem determined to embezzle every fund in their care.

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