The Sovereign Wealth Fund controversy

The sovereign wealth fund is intended to replace the notorious excess crude account which the civil leadership in Abuja has since the current upsurge in the price of crude oil in the international market, used as both carrot and stick to secure compliance on the part of the very powerful state governors in Nigeria who […]

The sovereign wealth fund is intended to replace the notorious excess crude account which the civil leadership in Abuja has since the current upsurge in the price of crude oil in the international market, used as both carrot and stick to secure compliance on the part of the very powerful state governors in Nigeria who have since realized their constitutional superiority to any other organ of the federation, uniting under the much contested and criticized Nigeria Governors’ Forum. An association that I find very relevant and important in view of the critical problems facing our nascent democracy.

Let me begin by first of all associating myself with the Governors’ Forum because I believe that it is necessary that though Nigeria is a federation where the states are the units of the alliance, even if artificially contrived by the successive military governments that have held power since 1966, some form of unity even if selfish must be encouraged amongst the leadership of the constituent units of the federation even if for the reason of checking the excessive powers and might of the center.

Nigeria’s federalism is heavily skewed in favor of the center. That is why for instance the federal government takes about 52% of the collectible federal revenue that is shared amongst the three tiers of government. The constitution has conferred tremendous powers on the center to the extent that states are made to share all their powers with the federal government.

Apart from the exclusive responsibility list which vests specific powers of defense, security, foreign relations and currency matters to the center, all items under the concurrent responsibility list are shared between the center and the states. This is responsible for the huge allocation to the federal government and the inability to therefore supervise over critical areas such as education, health, agriculture and even transportation, among others.

The argument here is, in other federal climes, the central government may of course be involved in all these matters enumerated above but purely to the extent of policy formulation, supervision and quality control but not actual abcd of the application and implementation. In education for instance, the federal government may legislate in the area of policy. What national policy on education may be, how to improve and maintain standard and also draw the borders within which all states must exist and be confined within. It doesn’t make any political and economic sense for the federal government to waste precious time and resources given its slim manpower and size in building schools, running, supervising and maintaining them. That is why our public school system like many other sectors have since collapsed.

Similarly is the case with the health sector, agriculture and most other items on the concurrent legislative list. The desperation to keep to these powers by the center in my view is not unrelated to the common ground rule in federal setups. That is, the more the responsibilities a tier of government is entrusted with, the more it takes from the federation account.

That is why a few months ago when President Jonathan sponsored a minimum wage bill which was eventually passed by the 6th National Assembly and accented to just before the end of his last tenure, I knew that the states were in for a big problem. Many of them, except if they undergo thorough self cleansing in their workforce, will not be able to pay the bills of their workers who in any case do not constitute up to 1% of the states’ population.

When the governors responded to the new development by asking for constitutional amendment so that they take more shares from the federation account, my advice to them then was, they were on the wrong footing and needed to re-strategize if they were to play more effective role in the Nigerian Federation. No unit or level earns more money just because it is made to pay higher wages or bills.

States can have more money from the federation account if they insist on a constitutional amendment which will reduce the workload from the ineffective centre and entrust more to the states. This must be done if the states are to earn more from what Nigeria makes; but I hope the governors know very well that the president and his men would do everything possible to resist any such move and in fact instead, other means of taking more from the states would be deployed. The sovereign wealth fund may as well be one such strategy if care is not taken.

It is not possible for the President to now hide under the toga of a law created by the National Assembly to create this fund. In fact, the constitution is very clear and explicit on the issue of any law that is a contravention to its provision. So as a matter of political fact, the Sovereign Fund Act was dead on arrival but as is the case with the minimum wage issue, it is left for the governors to go to court and seek constitutional interpretation. If they do, they will succeed, if they don’t, they will not.

You see, there are certain facts that most of us Nigerians avoid. Because the governors are closer to us, we despise them, we condemn them, we hardly give them the chance that they deserve, but as far as the constitution of Nigeria is concerned, there is nothing anybody can do about the tremendous powers that the Governors wield because they are heads of the units that make up the federation.

I told my friends in the parliament, times without number, that the only way we may reduce the tremendous powers of any Governor is by ensuring that those who wield these powers derive their legitimacy from the people. Period. I know very well through actions and utterances that President Jonathan himself has, since his days as acting President, been in search of ways and means that the powers and influences of the governors, especially those within his PDP cabal is reduced.

I am an advocate of power devolution and more resources accruing to the states because it is easier for us to hold our governors accountable and responsible than to hold the president, in fact we can’t reach him, it is impossible only the chosen few can. The crisis should be resolved as soon as possible please. While agreeing with the philosophy behind the fund, the center must not use resources meant for the states to harass them as we have seen in several cases in this country.