Nigerian govt sued over budgetary allocations to institutions not established by law

THE Nigerian government each year allocates billions of naira to non-statutory institutions – agencies that are not established or backed by the country’s extant laws.

Budgetary allocations to non-statutory agencies are the subject of a lawsuit that is pending before an Abuja Federal High Court.

In the suit numbered FHC/ABJ/CS/273/2021, the court was asked to determine whether, going by the provisions of the 1999 Constitution, the national budget should cater for non-statutory institutions.

The court was also asked to determine whether the Nigerian government could provide for and fund bodies not established and backed by extant laws.

The suit was filed by an activist, Sesugh Akume, through his lawyer, Rodney Adzuanaga. The originating summons was brought pursuant to sections 4, 80, 81 and 82 of the 1999 Constitution (amended) and the Appropriation Act, 2021.

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According to the court papers obtained by The ICIR, some of the agencies ‘unknown to law’ that were identified to have been allocated funds in the 2021 budget (with their budget codes) included: Nigerian Institute for Education Planning and Administration 0517007001; National Metallurgical Training Institute 0233006001; National Centre for Technology Management (and all its extension and branches) 0228033001/0228034001; National Engineering Design and Development Centre 0228035001; National Horticultural Research Institute 0215011001; and National Power Training Institute 0231010001.

The National Power Training Institute was owned by the defunct NEPA/PHCN and despite the fact that there was nowhere it appeared in the Electric Power Sector Reform Act 2005, it is still being allocated funds in annual national budgets.

Other non-statutory agencies allocated funds in the 2021 budget, according to the lawsuit, were: National Board for Arabic and Islamic Studies 0517030001; National Biotechnology Development Agency (and all its extensions and branches) 0228008001-0228008039; National Institute for Tourism and Hospitality Development Studies 0123031011; Service Compact (SERVICOM) 0161019001; National Integrated Water Resources Management Commission 0252050001; National Office for Trade Negotiations 0222031001; Nigerian Army University Biu 0517021044; and National Research Institute for Chemical Technology 0228044001.

The National Research Institute for Chemical Technology was initially established by Decree 35 of 1973 but later became NARICT. The NARICT was transformed into the Nigerian Institute of Leather and Science Technology (NILEST) in 2010 and NILEST was allocated funds in the 2021 budget with the code 0228050001.

Yet, although National Research Institute for Chemical Technology is supposed to be defunct, having been replaced by NILEST, it still has an ‘operational’ status,’ receiving federal funding.

The lawsuit further identified a number of federal medical centres that were existing without enabling laws but were allocated funds in the 2021 budget.

The FMCs included: those in Abeokuta, Abuja, Asaba, Azare, Bida, Birnin Kebbi, Birnin Kudu, Ebute-Meta, Gusau, Jalingo, Katsina, Keffi, Lokoja, Makurdi, Nguru, Owerri, Owo, Umuahia, Yenagoa and Yola.

The National Centre for the Control of Small Arms and Light Weapons (NATFORCE) was not directly allocated funds in the budget but the lawsuit noted that the outfit, which was not established nor backed by extant laws, was being funded under the Office of the National Security Adviser, with a chief executive officer and staff paid with public funds.

Some of the non-statutory institutions are undergoing the legislative process for establishment but the applicant, Akume, in a supporting affidavit, argued that they could only become statutory institutions when their establishment bills were signed into law.

The National Assembly, Senate President, Speaker of the House of Representatives, Chairman of Senate Committee on Appropriations, Chairman of House Committee on Appropriations and Clerk of the National Assembly were listed as the defendants in the lawsuit.

Other defendants were: Minister of Finance, Budget and National Planning; Director-General Budget Office of the Federation, and the Minister of Justice and Attorney-General of the Federation.

Minister of Finance, Budget and National Planning Zainab Ahmed
Minister of Finance, Budget and National Planning Zainab Ahmed

Upon consideration of the issues for determination – whether the budget should cater for non-statutory bodies and whether the Nigerian government could fund institutions not backed by extant laws – the court was asked to make an order and declaration that the “Appropriation Bill, Supplementary Appropriation Bill and Appropriation Act does not provide for non-statutory institutions.”

The plaintiff, Akume, also asked the court to compel the Minister of Finance, Budget and National Planning and the DG of the Budget Office of the Federation to ensure that the Appropriation (or Supplementary Appropriation) Bills had the title of the establishment Act of each institution along with the expenditure submitted to the National Assembly by the president.

The court was equally asked to grant an order of perpetual injunction barring the National Assembly from attending to any appropriation bill that did not have the title of the establishment Act of the various institutions.

In the same vein, the court was asked to grant an order of perpetual injunction barring the National Assembly from allocating funds to institutions not established or backed by extant laws.

Stating grounds upon which the reliefs were sought, the plaintiff argued that the 1999 Constitution of the Federal Republic of Nigeria envisaged that only public institutions whose existence were backed by law could be provided for in annual budgets.

“In the 2021 budget (and others before it) the Federal Government and the National Assembly authorised billions of naira to be spent by bodies unknown to law,” the plaintiff added, noting that there was an urgent need to interpret relevant constitutional provisions in order to address the ‘anomalies and abuses.’

In a verifying affidavit in support of the originating summons, dated March 4, 2021, the applicant – Akume – observed that the annual national budgets of the Nigerian government were largely for recurrent expenditure used to run the machinery of government, with little or no benefit to the country’s citizens.

Linking the development to the high cost of governance in Nigeria, Akume observed that many of the concerned non-statutory institutions were duplicates of other existing agencies and as such had no clear responsibilities.

“The government of Nigeria itself has repeatedly complained that it is over-bloated with too many ministries, extra ministerial departments and agencies, with many of them doing the very same things; a large number of which are mere arrangements, unknown to law.”

The applicant further observed that despite different committees set up over the years to address the bloated and dysfunctional structure of the ministries, departments and agencies (MDAs), including the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies, also known as the ‘Oronsaye Committee,’ the Nigerian government had not shown the will and determination to correct the problem.

“In spite of this over-bloating of the government with numerous public institutions (many of them doing the same things), the government further spends billions of naira yearly on public institutions not established nor backed by enabling law, therefore unknown to law,” the applicant further observed.

The National Assembly was accused of ‘promoting the recklessness’ by yearly allocating funds to the non-statutory institutions in national budgets.

“The country could have saved the billions of naira budgeted and released to such institutions unknown to law, or better channelled them for legitimate causes that benefit the citizens,” Akume noted.

He added that, in cases where the institutions were still undergoing the legislative process for establishment, the proper approach would have been for the government to first of all conclude their establishment by law “so that appropriating to them will be lawful, even if wastage by increasing the number of MDAs in most cases.”

According to the Oronsaye Report, as of 2011, out of 541 public institutions in Nigeria, 50 were non-statutory as they were not established by extant enabling laws.

“As of 2020, instead of reducing, there were 929 MDAs with the exact number of non-statutory public institutions being budgeted for unknown, and it is nearly impossible to unravel them all,” the applicant observed, noting that making budgetary proposals and appropriating funds for institutions unknown to the law amounted to an aberration, lawlessness as well as abuse and wastage of public funds.

Akume, in the affidavit, expressed concerns that if the situation was not addressed through a judicial pronouncement, the level of impunity could get to a level where private organisations would be funded with public funds through budgetary allocations.

    Sesugh Akume
    Sesugh Akume

    “The organisations unknown to law funded with public funds today without legal backing are purported to be public institutions – the grave danger is if this ugly trend is allowed to continue, the impunity could grow to a level where even private organisations would be funded from the public fund without legal backing.”

    • Judicial workers’ strike stalls hearing, court to issue fresh date 

    The lawsuit, which is before Court 3 of the Abuja Federal High Court, presided by Justice Anwuli Chikere, was scheduled for mention for commencement of proper hearing, on May 10.

    But the court could not sit on the date as a result of the strike action embarked on by the Judiciary Staff Union of Nigeria (JUSUN) to press for financial autonomy of the judiciary.

    The strike has since been called off and the applicant, Akume, told The ICIR on July 14 that the court was to fix a new date to commence hearing on the lawsuit.

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