Nigerian Court Declares Deductions from Federation Account to Fund Agencies Unconstitutional

Justice Ahmed Mohammed of the Abuja Division of the Federal High Court on Wednesday declared as illegal, unlawful and unconstitutional the direct allocations made by the federal government from the federation account to fund the Nigeria Police Trust Fund. Mohammed barred the federal government from further deductions from the federation account to fund agencies not listed in the 1999 Constitution for direct allocation.

Reacting to the ruling, Rivers State Governor, Mr. Nyesom Wike, stated that the judgement was a resounding victory for democracy.

The court, in the judgment, held that Section 161 and Section 162 of the 1999 Constitution were glaringly breached by the federal government following the direct allocation from the federation account to the Police Trust Fund.

The suit challenging the continued deductions from the federation account to fund agencies belonging to the federal government was filed by the Rivers State Government.

Delivering judgement, the court held that Section 162 of the 1999 Constitution was clear and unambiguous to the effect that only the federal, states and local governments shall be allocated fund directly from the federation account.

The court also held that Section 4 of the Nigeria Police Trust Fund Act 2019 relied upon by the federal government to justify the unlawful deductions from the federation account was inconsistent with section 162 of the 1999 Constitution which recognises only the federal, states and local governments.

Mohammed, while upholding the suit by Rivers State against the deductions, ordered that the fund belonging to Rivers State but used to fund the Nigeria Police Trust fund by the federal government should be refunded to the state.

The judge, however, declined to extend similar order of refund to the 35 remaining states on the grounds that they were not parties in the suit, adding that Rivers State, as the plaintiff in this matter, did not file it on behalf of others.

The court upheld all arguments of Joseph Daudu, who stood for Rivers State, that where the provisions of the 1999 Constitution are clear and unambiguous, they must be given their ordinary meanings.

Mohammed also agreed with Daudu that the federal government was completely wrong in the interpretation given to section 4 of the Nigeria Police Trust Fund Act to the effect that the Nigerian Police was established for the federal government alone and as such the funding should solely be on the shoulders of the federal government.

Rivers State in a suit marked FHC/ABJ/CS/511/2020 and instituted on its behalf by former President of the Nigerian Bar Association, Daudu, had challenged the decision of the federal government to allocate funds directly from the federation account to fund some of its agencies, stating that the decision violates section 162 of the 1999 Constitution.

The Rivers State government also stated that the actions of the federal government deprived it substantial revenue from the federation account and, therefore, prayed the court to nullify the allocation from the federation account.

The plaintiff also claimed that the levies imposed on companies operating in Nigeria by the federal government, be paid directly to the Nigeria Police Force Trust Fund, instead of the federation account was also illegal.

The judge agreed with the plaintiff that under the relevant laws, such levies were supposed to be paid directly to the federation account and not to any federal government agencies.

The judge held, “I have carefully perused the issues raised by the plaintiff and I agree that no other person or entity is permitted to benefit direct fund allocation from the federation account.

“Section 4 of the Nigeria Police Trust Fund Act 2019 relied upon by the defendant to make direct fund allocation from the Federation Account is untenable as it runs contrary to section 162 (3) of the 1999 Constitution, which expressly stated that the federal government, state governments and local governments shall derive direct fund allocation from the federation account.”

Defendant in the matter were the Attorney General of the Federation and Minister of Justice (AGF); Accountant General of the Federation; Revenue Mobilisation Allocation and Fiscal Commission and Minister of Finance.

However only the Attorney General of the Federation filled processes to defend the federal government’s action.

The AGF had in his preliminary objection asked the Federal High Court to decline jurisdiction in the matter on the ground that such suit ought to be filed directly at the Supreme Court.

However, the preliminary objection was dismissed by Mohammed on the ground that it was misplaced and absurd.

Meanwhile, Wike hailed the ruling, noting that the Nigeria Police Trust Fund Act, which the federal government relied on deduct funds from the Federation Account was in contravention of the 1999 Constitution.

Fayemi said, “I have always told people, it is not whether you must win or not, but it is a matter of when you see issues that you think are in contravention of our constitution and other laws, there is nothing wrong for you to challenge it, so that the right thing can be done.

 “After all, if the money is given back to us, we can still on our own say police, we want to support you with this. But not the federal government arbitrarily deducting our money from the federation account and putting it to Police Trust Fund. I don’t think that, that is right and I thank God that today the court has made a clear pronouncement on it.”

The governor acknowledged that though the National Assembly was constitutionally empowered to enact laws, in enacting the Police Trust Fund Act, they went beyond their powers by contravening the provisions of the constitution.

 Speaking further on the order of the court that the Rivers State government should be refunded the money deducted from its share to fund the police, Wike said the order would put an end to impunity.

The governor said, “We are happy that the court has said that they should refund us all the money deducted and, luckily, the principal parties, Revenue Mobilisation and Fiscal Commission, the Accountant General, Attorney General Office, they are all involved in the case.

 “It is not about Rivers State, but it is about the impunity, it is about the violation of the constitution, as if anybody can wake up one early morning and just decide to do one or two things, which is wrong. And I am happy that the decision we took, we are not wrong and I thank my legal team.”

Alex Enumah in Abuja and
Blessing Ibunge in Port Harcourt

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