By Emmanuel Aziken, Political Editor; Abdulwahab Abdulah, Henry Umoru & Emman Ovuakporie
LAGOS—The estimated N1.75 trillion bailout funds disbursed by the Federal Government to states were illegally transferred, a two-time chairman of the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, Engr. Hamman Tukur, has said.
Tukur in an interview, said President Muhammadu Buhari has no authority under the law setting up the Federation Account to touch the funds and also lacks authority to disburse the Federal Government’s entitlement of the Federation Account without the approval of the National Assembly.
His assertion was, however, challenged by the Nigerian Governors Forum, some senior lawyers and some legislators, who declared the disbursements as legal.
The Centre for Anti-Corruption and Open Leadership, CACOL, also backed the disbursements in so far as it was done out of the federation account to which the beneficiaries of the loans were also stakeholders.
The estimated N1.75 trillion disbursed to the states were transferred in about four tranches to some states which were stressed by the inability to meet up with the payment of salaries.
Querying the legality of the bailouts in an interview with Economic Confidential, Engr. Tukur said: “Buhari gave out a lot of money to states recently in the name of a bail-out. Who gave him that money? How did he get access to the Federation Account, or the authority to release that money? Did he go through appropriation for approval? If he released the money before it was approved, then it is illegal.
“In any case, who told the states to be broke? Who stole their money? He (Buhari) should have asked the state governors where their money was. Some people argue that the money used for the bail-out was from the Nigeria LNG dividend. But, the Constitution is very clear; all revenues of government must go into the Federation Account first, before anything.
“The only exception that is made is written in the Constitution itself, and that is Armed Forces, including the military, Police and Federal Capital Territory (FCT). Any tax being paid by anybody or agency to the government, by whatever description, should be channeled to the Federation Account.”
Tukur recalled that RMAFC also rejected such moves during the Olusegun Obasanjo administration.
“Yes, I think it was only when Obasanjo asked for $5.3 billion to finance NIPP (National Integrated Power Project) that the Commission said he cannot take it from the Federation Account without recourse to other tiers of government.
“We told him that if he wanted any money, he should take it from the Federal Government’s share of the money, and then go to the National Assembly for approval.
“You are aware of the recent bail-out by the Federal Government to states. The president should tread softly. We have to caution President Buhari the same way we did to Obasanjo when he wanted $5.3 billion.
“When the Commission said he cannot take the money, one day he had to send then Secretary to the Government of the Federation, Alhaji Yayale Ahmed to tell the Commission that he wanted that money. I said no, the money does not belong to me, but the Federation Account. What that means is that all the three tiers of government that own the Account must be aware and agree that the money be withdrawn for the purpose.
“Then the formula for sharing between the federal, states and local governments would apply. There should be no question of states staying somewhere to allocate what the local governments want. This is wrong. The money in the Federation Account belongs to the federal, states and the local governments. This is democracy.
“That is why one of the key responsibilities of the Commission is to mobilize government revenue to the Federation Account before allocating. It is total. Exceptions are clear, so that no one can pretend.
“What that means is that wherever any revenue has not been remitted to the Federation Account by any agency, the Commission must ask questions. If any money must be released, the National Assembly must be approached for supplementary appropriation”, he said.
Tukur is wrong — NGF
Faulting Tukur yesterday, the Nigerian Governors’ Forum, NGF, said his claim is wrong, noting that the bailouts helped energise the local economies and in turn the economy of the country.
“Hamman Tukur is not exactly correct. Bailouts are legitimate ways of re-energising the economy. The states of Vermont, New Jersey, and even New York received bailouts from the United States of America, US, government in the past.
“Bailouts also effectively reignite economic activity in cases where the economy is experiencing a downturn. Just as Greece was recently bailed out by the European Union, EU.
“Let’s not also discount the fact that when the US government bailed out GMC, an auto giant, Americans called it Government Motor Corporation. So, bailouts are perfectly legal,” Head, Media and Public Affairs, Abdulrazak Barkindo, said.
Some senior lawyers also responded to the development, yesterday.
Government steps need to be challenged — Norrison Quakers, SAN
Quakers speaking yesterday, said: “We have the Fiscal Responsibility Act (FRA), which makes provision for how the government at the three levels spend money responsibly, and they have to account for all their spending. Now, if you marry the FRA with the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, whatever we do must come under these two laws.
“Whatever is spent which does not fall under the purview of these laws can be challenged by any interested party.
“Any interested party can challenge this step by the government. A tax payer can ask the government to comply with the extant laws regulating such funds.”
Bailout is loan to the states, which must be paid back—Femi Falana, SAN
Falana on his part, said: “Whichever funds regarded as bailout must be paid back by any state government that benefited from such fund, when the economy improves. However, where did the man get his law from? To me, the bailout fund is different from the Paris Club refund given to the states. The Federal Government paid out money to London and Paris Clubs, which were deducted from the Federal allocations meant for the states without consultation with the states and the local governments, which made them sue the FG eventually. But the two parties eventually agreed on out-of-court settlement. That is Paris refund. The first one (payment) was also part of the fund shared from the LNG money from the Federation Account.”
No justification for his argument — Tokunbo Mumuni, SERAP executive director
Also disagreeing with Tukur, Mumuni, a lawyer and executive director of Socio-Economic Rights and Accountability Project (SERAP) said: “If you say something is illegal, you are saying it is something that cannot be justified under any law. So, if the man said the government’s action is illegal, he needs to justify it with the law. To me the bailout fund was the refund from the overpayment to Paris Club which was deducted from the state’s funds, that is now being refunded. If the fund is what is returned to the states, he cannot say it is illegal. The ex RMAFC chair cannot speak on that because it is not under his purview. He can only speak on payment of salaries.”
Also speaking on the issue, Comrade Debo Adeniran, chairman of the Centre for Anti-Corruption and Open Leadership, CACOL, said the disbursements could not be totally classified as illegal on the strength of the fact that it was done to bail out the states from collapse.
“It couldn’t have been illegal since the Federation Account belongs to the three tiers of government, and the states who benefited draw from the account.
“That does not mean we should continue that way so that the states would continue on a kind of feeding-bottle federalism.
Member of the House of Representatives, Rep Uzoma Nkem-Abonta (PDP, Abia), on his part, also backed the Federal Government, saying “the Federal Government must have applied the doctrine of necessity to avert greater damage to the states that could no longer pay salaries to their workers.”
Speaking in the same vein, Majority Leader of the Delta State House of Assembly, Mr. Tim Owhefere, described the situation as the Devil’s Alternative as the Federal Government had to save most states from collapse.
He said: “If the Federal Government had not doled out such funds some of the states by now would have gone under.”