CAN COOPERATIVE FEDERALISM WORK IN NIGERIA?

Featured

Tags

, , ,

Nigeria is a country of so many ethnic nationalities and so has been striving to evolve a workable framework that harmonizes the often-conflicting interests of these nationalities. As a result of our large population and territory, the most effective political system is federalism because it enables us to have diverse ways of organizing ourselves. Many people say the 1963 Republican Constitution was the best ever because it allowed the different regions to express themselves.  The South produced cocoa, the North groundnut and the East palm oil. There was space for each region. But today people criticize strong unitary federalism because it forces the component units under a strong center and so most people feel returning to the 1963 Constitution is better and therefore restructuring has become a big issue. But restructuring has challenges because it has to be nationally accepted but has not. The issue is whether to look for other models? Restructuring is like sitting atop a 10 story building which we will eventually get to. But we have to come from the ground floor up.  This is why I have proposed Cooperative Federalism for consideration. Of course, there are many other models of Federalism.  

George Anderson, in his book “Federalism: An Introduction”, has identified some of the models. There are dualist and integrated models of Federalism. The dualist model typically assigns different jurisdictions to each order of government, which then delivers and administers its own programs. The integrated model provides for many shared competences and the constituent – unit governments often administer centrally legislated programs or laws. Under the dualist, or classical, model of federalism, constitutional jurisdiction over different subjects is usually assigned exclusively to one order of government. In this model, each order of government normally delivers programs in its area of responsibility, using its civil service and departments; the federal government’s departments are thus present throughout the country.

In practice, the dualist model does not achieve a neat separation of powers because so many issues have regional, national, even international dimensions and many different responsibilities of governments are themselves intertwined. In all dualist constitutions, there are some shared or concurrent powers in which both orders of government can make laws. Canada and Belgium have few concurrent powers, while Australia has very extensive concurrency. Where powers are concurrent, federal law is generally, but not always, paramount, meaning it prevails in cases of conflict. Also, there can be de facto concurrency when both orders of government have different powers that bear on a question: this is a kind of shared power and typically it does not involve paramountcy. For example, in old constitutions, the environment is not usually a head of power, but both orders of government may have different legal powers that permit them to regulate the environmental impacts of a major infrastructure project, so it can proceed only if they both agree.

Under the integrated (or interlocking) model of federalism, exemplified by Germany, some subject matters are exclusively assigned to one order of government (e.g. defence to the federal government), but most subject matters are concurrent, where the central government sets framework legislation that the constituent units can complement (but not contravene) with their own legislation. As well, the governments of the constituent units deliver programs in these concurrent areas. Thus the central government has a small civil service in the regions, largely limited to its areas of exclusive competence. This model is also sometimes called administrative federalism because the principal powers of the constituent units are administrative. A great challenge in this model is restricting the detail of central policy-making to leave room for decisions and laws at the level of constituent units. The German model also provides for joint decision making affecting these areas of concurrency, in that relevant federal laws must be approved by a majority vote of the representatives of the Lander in the Bundesrat.  South Africa has adopted aspects of this model. Canada, Brazil and the United States are examples of largely dualist federations; Germany, Austria, South Africa, and Spain follow the interlocking model. India and Switzerland have strong features of both. Australia is largely dualist in administrative arrangements but has so many areas of concurrency that it has some strongly interlocking features.

What these models illustrate is that no federation is purely of one form.  The purpose of a federation is for the different power centres Federal and States to cooperate. In our case, as it relates to Cooperative Federalism, States and the Federal Government can work together for economic development.  Infrastructure and solid minerals development readily come to mind. Based on the principle of subsidiarity in Federalism which is incorporating the government closest to the people, infrastructure can be commonly developed, for instance, the East-West High Way that has been uncompleted because responsibility excludes relevant state governments but under the principle of subsidiarity including state governments improves implementation and also ownership. States with solid minerals can have cooperative federalism with the federal government to explore their solid minerals.

Ondo state has one of the world’s richest bitumen; Enugu has one of the world’s richest reserve of coal, Ebony has one of the best salt mines valued at about N14 billion. What stops states from cooperating with the federal government to harness minerals?  Look at police, in the Constitution under the National Police Council, all the 36 state governors play a role in picking the Inspector General of Police but the states have never requested that the President summon a meeting of the Police Council since 1998 yet they complain. Actually, under the current Constitution under both the exclusive and concurrent list schemes of cooperation exist but it has not been harnessed, for example, states can build power stations and there are several other schemes. So rather than looking to restructuring which is distant, it is good to look at what is in the 1999 Constitution because that cooperation will allow development. This is no way derogates from Restructuring. It simply means we all have to work towards attaining the goal of restructuring but we can have Cooperative Federalism to deepen the process of democracy.

DR. OLISA AGBAKOBA SAN

CO-OPERATIVE FEDERALISM AND ECONOMIC TRANSFORMATION

Featured

Tags

, , , ,

Now that we have come to the end of elections by the decision of the Supreme Court, political federalism or by its more popular name “restructuring” may be the way to go but it has not been understood and generally accepted. I understand it but many ask, what is restructuring? I have to admit that the only way restructuring can work is if it is nationally accepted. It would appear to me that political restructuring even though important is dividing us and impeding development. I suggest that it may be time to talk about another model of development whilst the restructuring debate continues.

I think what might unite us all in the quest for development is Cooperative Federalism and Economic Transformation. Cooperative Federalism simply means governments can work together for economic development. Infrastructure and power readily come to mind. Based on the principle of subsidiarity in Federalism which is incorporating the government closest to the people, infrastructure can be commonly developed, for instance, the East West High Way that has been uncompleted because responsibility excludes relevant state governments but under the principle of subsidiarity including state governments improves implementation and also ownership.

I have no doubt that Cooperative Federalism and Economic Transformation if well executed will be accepted by all Nigerians who simply want a good life; good health care, jobs etc.  

Sincerely,

 Dr. Olisa Agbakoba SAN 

Legal & Institutional Restructuring for the Next Nigeria

Featured

Tags

, , , , , ,

Development law is a public policy tool that intersects law and economic development.   Development law scholars agree that there is a strong link between law, regulatory institutions, governance, economic development and national welfare. It is argued that the Nigerian legal and judicial framework is hopelessly outdated and needs an urgent review to meet current challenges. Yet governments generally fail to link legal policy, economic development and governance. The late Prof. Mansur was the leading scholar on this linkage. Economic transformation depends on vital legal institutional, regulatory and governance frameworks. The links unfortunately between legal institutions, political economy and development have often, and in our case, been completely overlooked or missed, hence under-development.

Hernado De Soto in his unique book “The Mystery of Capital”  gives a striking example of law as a key primer of development using just one index; property law. Property consists of two values, physical and conceptual. The physical value may be fixed in say, a house. The abstract or conceptual value is fixed in property law systems. In developed nations, property law allows owners of housing, to represent their value in the conceptual realm. This possibility allows easy access to credit that in turn generates capital for development. In Nigeria with a very weak legal regime, conceptual representation of property to create value is absent. Yet the assets inventory of Nigerian housing exceeds six trillion dollars. But this is dead capital. If the housing value is indexed to the banking system by massive legal reform of the property law system, we can create an instant credit market with major impact on development. In this way, we wake up dead capital for development.

It is important therefore that policymakers must consider that although macro policies are unquestionably important, there is a growing consensus that the quality of business regulations and the legal institutions that enforce it are a major determinant of development. If development law is applied as a public policy tool in the following areas, for example, Financial Services Sector, National Trade Policy, Maritime, Aviation and Space, Legal and Justice Sector, Land Administration, Corruption, Social Security Administration etc. It will transform the economy, create millions of jobs and pull 200 million Nigerians out of poverty.

FINANCIAL SERVICES SECTOR

The Financial Services Sector (FSS) is the oxygen and lifeblood of a strong economy. The FSS ought to consist of the following key institutions, the Banks, the National Credit Guarantee Agency, a Development Bank and the CBN.  The banks lend to the real sector of the economy and consumers and ensure the economy is stimulated. In Nigeria, it is doubtful if the banks have performed optimally, delivering on cash to the real sector and consumers. They seem to be engaged in short term lending including treasury bills. The result is that the economy is anaemic.  A banking policy that delivers resources to the economy is needed. In the US, the Glass – Steagall Act and Frank-Dodd Act focused banks on the proper role to lend to consumers at low-interest rates. The second key FSS institution is the National Credit Guarantee Agency. This is absent in Nigeria. The National Credit Guarantee Agency supports viable business proposals. When viable business proposals are guaranteed, the economy gets stimulated and expanded and that gets converted to goods and services that are sold on to consumers. The economy will benefit from the establishment of the National Credit Guarantee Agency. The third FSS institution is a Development Bank to lend to the vital sectors of the economy. The Development Bank of Nigeria is undercapitalized and so the CBN plays a distorted role. The Development Bank of Nigeria needs to be properly capitalized so it can support the economy.  The CBN is the fourth FSS institution. The CBN as presently constituted is overburdened with far too many things – monetary policy, banking supervision and banking. The major role of the CBN is monetary policy stability and so the CBN may benefit from streamlining and strengthening its legal framework. A new policy and legislation can unbundle the CBN and create a new agency to regulate banks by ensuring they deliver on core mandate. In England, they have the Prudential Regulatory Authority.

NATIONAL TRADE POLICY

Tied to the FSS is the need for a National Trade Policy to stimulate local industry, grow exports and reduce dumping of foreign goods. The Central Bank of Nigeria recently stated at the launch of its vision and policy thrust for the next 5 years, that it will target unscrupulous individuals and businesses that embark on massive smuggling and dumping of goods that can be produced in the country thus leading to the demise of our agriculture and manufacturing sectors. This needs to be supported. There is a need to strengthen the National Office of Trade Policy. This Office has to be ministerial level. Trade laws have import substitution as their main goal. This means to reduce imports and create local industries. The National Assembly can pass legislation to establish the Trade Remedies Agency, devoted fully to fair trade issues. This will support our local industries around Rice, maize, cassava, cotton, cocoa, tomato, oil palm, poultry, fish, etc. Trade policy on Fly Nigeria will grow Nigeria Airlines, a strong Cabotage Act will grow shipping lines, oil and gas, legal, banking, insurance, shipping etc. If trade legislation is favourable, Trillions of Naira will flow with Job creation in the millions.

REVIEW OF NIGERIA’S BILATERAL INVESTMENT TREATIES

Flowing from the discussion on trade policy; there is a need to review Nigeria’s Bilateral Investment Treaties (BITs). BITs are part of a countries trade policy. Nigeria is a signatory to over 30 bilateral investment treaties. The recent arbitration award secured by a company, Process and Industrial Developments Limited (P&IDL) has raised the question of how fair it is for Nigeria to have arbitration clause with a foreign seat. We understand that an Executive Order is currently under contemplation to make Nigeria the seat of arbitration and require parties to choose an arbitration institution in Nigeria. While the proposed Executive Order is laudable, it is our opinion that the Order might be confronted by challenges that might defeat the essence of enacting it. It will be recalled that Arbitration Agreements are embedded in Bilateral Investment Treaties (BITs) that Nigeria has signed and ratified with many countries. An Executive Order may conflict with the BITs. This is so because BIT’s provide that disputes arising between Nigeria and foreign investors will be determined in foreign institutions of arbitration and seeking to alter this position simply by an Executive Order might generate significant opposition by concerned interests. Furthermore, the Executive Order might conflict with the underpinning principles of arbitration that are premised on the notion that parties to an arbitration have a right to determine the arbitration institution and arbitrators that will undertake the arbitration proceedings. Given the above, we would rather suggest that an Executive Order should create a National Work Group that will be authorized to review the scheme of the arbitration provisions currently incorporated in the BITs, and the task of proposing how Arbitration connected to Nigeria will have Nigeria as seat of Arbitration. 

MARITIME MATTERS

This is potentially the largest economic sector outside of hydrocarbons. Nigeria’s maritime sector is estimated to be capable of GENERATING 7 TRILLION NAIRA ANNUALLY AND 4 MILLION JOBS OVER 5 YEARS.  However, to tap revenue from this sector there needs to be an overhaul of policy, institutional, regulatory and legal framework. For instance, the Government needs to immediately implement the policy for Inland Container Depots (ICDS). We have 6 (Six) ICDS spread across the geopolitical zones that can generate at least 15,000 jobs for different levels of manpower. Due to the lack of infrastructure to support business and operations by concessionaires, these depots have not been optimally utilized. 80 per cent of Nigerian trade is diverted to ports in Cotonou and other West African ports. Further to this is the need to review our cabotage regime to stem capital flight and boost capacity for Nigeria’s Shipowners. Despite the enactment of the Coastal and Inland Shipping Act 2003 Nigeria loses an estimated 7 Trillion Naira in the shipping sector. Foreign vessels trade in violation of the Cabotage regime. This is responsible for capital flight. There is a need for immediate enactment of several critical bills pending before the National Assembly. This would facilitate the legal framework to move the maritime sector to the next level. Such bills as the Petroleum Industry Bill (PIB), the Ports and Harbour Bill, Maritime Zones Bill, Ocean Bill etc. are yet to be passed into law. There is also an urgent need to review the Nigerian Shipping Policy of 1987.  

AVIATION/SPACE

The Aviation Sector requires major reform. Nigeria has no presence in the Aviation business. Nigeria Airways has been long comatose. Foreign aircraft dominate the Nigerian airspace and earn well over a trillion Naira to our exclusion. A trillion Naira is about a quarter of our entire national budget. A Fly Nigeria Bill will ensure that every government Naira used to purchase a ticket must originate and terminate on a Nigerian carrier. This Fly Nigeria Bill will create an instant market for our national carrier.

On Space, it has been said that that the future of mankind is in Space. Space has many major applications for developing our economy. We will mention at least three examples. First, space can be applied to the energy sector as remote sensing can tell us the quantum of our hydrocarbons. Second, it is the value of space applications to the Maritime sector. Third, it is the link between space and national security. Satellite technology intelligence gives us vital footprints in the national security infrastructure. The growing threat of terrorism and the adverse impact on economic stability can only be checked by intelligence provided by space satellites. We must upgrade our space legislation. 

LEGAL/JUSTICE SECTOR ISSUES

The legal and judicial system has experienced legal failure.  The judicial system has never really been reformed. The Nigerian judicature is based on the 1875 Judicature Act. The consequence is that cases take too long to resolve. It takes between 5 to 20 years to resolve simple contractual disputes. Investors, whether local and international will not invest in a country where there is no sanctity of contract and simple contractual disputes take between 5 to 20 years to resolve. We must give urgency to this sector and reverse legal failure. A speed of justice policy will reduce delays. In this regard, the National Assembly can consider introducing the Administration of Civil Justice Bill to ensure efficient administration of civil disputes.  Also, new methods of dispute resolution should be considered such as Alternative Dispute Resolutions, small claims courts, traditional and customary arbitration. Finally, quasi-judicial administrative tribunals can be established by sector, following the UK example. In England there exist many administrative courts to cover Telecommunications, taxation, transportation, Insurance, Education, Financial Services, Trade, Investments, etc. 

LAND ADMINISTRATION

The Land Use Act created a framework for ascertaining title and therefore it became easy to determine title. It also meant that landholding was major collateral for investment and financing. In doing this the state governors play an administrative role, issuing consents, licenses, permits etc. which has become overwhelming. The process has become clogged and as a result of this clog, the impact of land collateralization on lending and borrowing is affected. A recent study shows that the housing asset inventory of Nigerian property exceeds six trillion dollars. Most of this is dead capital and is not fungible. There is a need to wake up this six trillion dollars’ worth of dead capital. A Land Use Administration Commission Bill will make the Land Use Act and consent rules more efficient and instil confidence in financial institutions. This will impact positively, collateralization, lending and borrowing within the financial system.   

ANTI-CORRUPTION

The war against corruption requires an effective strategy. In addition to the strategy of prosecution, it is suggested to consider a 2-year moratorium from criminal prosecution. So legislation may be considered on immunity from criminal prosecution (Moratorium) Act. The Abacha case is now going 20 years with little result. This may be controversial but it is worth considering.

SOCIAL SECURITY ADMINISTRATION

The Federal Government has committed trillions of naira to administer social security to the elderly and vulnerable like the school feeding programme and Trader Moni but there is no legal framework. The standard operating model around the world is the creation of a benefits agency as it is called in England, and a social security agency as it is known in the US, to cater for those who are unable to look after themselves. The government will gain more by giving a legal framework for these benefits. Enacting a Social Security Administration Bill pursuant to Chapter 2 of the Constitution will see to the progressive realization of rights contained in Chapter 2 of the Constitution.

4TH BRANCH OF GOVERNMENT

This was developed by FDR in the 1930s and is why the US came out of the recession rapidly. The 4th branches are regulators who implement decisions of the Executive branch, which is the first branch. They are called the 4th branch because they exercise executive, legislative and quasi-judicial powers. In Nigeria, regulators like NAFDAC, SON, NERC etc. are part of the 4th Branch of government. They can make regulations, enforce them and impose penalties. Unfortunately, there is no standard operating model for these regulators. Most of them lack a basic understanding of their role as the 4th branch of government. It may be worth doing a high-level training workshop on the role of the 4th branch of government.  A strong 4th branch of government will improve the efficiency of government.  

CONCLUSION

Development law policy has succeeded wherever it has been applied. It has not been applied in Nigeria. If applied it will result in double-digit growth, more revenue and will pull millions of Nigerians out of poverty. It is strongly recommended that the government should adopt a development law policy as one of its economic policy tools.

Development Law & Economic Reforms

Featured

Tags

, , ,

Hernado De Sato’s unique book “The Mystery of Capital” proves the viability of the notion that development law can be a very powerful tool of Economic Reform. De Soto links economic failure in the third world and post-communist nations to legal failure in particular of property systems and the informal sector.

The broad theory that law, is a ‘catalyst of development was pioneered by the leading scholar in this field’ of inquiry, the late professor Mansur. Mansur said that classical theories of economic policy are no longer enough in framing development agendas. The search for new insights into economic development should include legal analysis.

When the study of economic development first became a separate entity, it was widely believed that the main obstacle to national development was a lack of classical factors of production, but it has been amply demonstrated that this is largely not a correct assumption.

Classical theories claimed that economic development was based on aggregate factors’ of production – capital, land and other natural resources, such as labour or human capital.

If these classical factors of economic development were enough, we may ask why this has not led to development in places like Nigeria and Russia that possess abundant aggregates of resources for development. Mansur’s simple explanation is that development will not occur unless the legal analysis is taken into account. This is the core notion of development law.

A·developed economy depends on vital legal frameworks and regulatory institutions. Consolidation as an economic policy may not, by itself, achieve it’s developmental objective to deepen banking and reach money locked away in the informal sector without fundamental legal institutional and regulatory reform.

This will require breaking up the Central Bank and reallocating its three key functions to new regulatory agencies including a new Financial Services Authority.

Again 70%· of money circulates outside the banking system. So it is important to· use new legal tools to integrate formal and informal banking. It is difficult to envisage how economic policy will do this all by itself.

De soto gives a very striking example of law as a key primer of development and used property law as illustration. Property consists of two values, physical and conceptual. The physical value may be fixed in say, a house. The abstract or conceptual value is fixed in Property Law systems.

In developed nations, property law allows owners of housing, to represent their value in the conceptual realm. This possibility allows easy access to credit that in turn generates capital for development.· In Nigeria with a very weak legal regime, a conceptual representation of property to create value is missing. Yet the housing asset inventory of Nigerian property exceeds six trillion dollars.

If the value of property is indexed to the banking system by massive legal reform of the property system, we can create an instant credit market in excess of our gross national domestic product multiplied by a thousand times – money will be then available to finance development. Debt servicing will be a simple issue.

But for this to occur and impact on the ongoing reform process, policy makers must, “consider that although macro policies are unquestionably important, there is a growing consensus that the quality of business regulation and the legal institutions that enforce it are a major determinant of development”.

Our key constraints to development include poor security, extremely weak commercial judicial systems, a generally weak legal system, impunity, corruption and· an unviable regulatory framework. These may be described as economic constraints.

No economic policy will remove these constraints. But it is development law that can help remove the constraints Of no mortgage systems in Nigeria, by the repeal of the Land Use Act and erection of a new law on property.

This should clearly identify owners of title deeds and allow easy transfers on property exchanges -, the so called notion of fungibility. De Soto’s book on development law was published to critical acclaim and is widely viewed as one of the most important contributions to development issues of all time.

Milton Friedman, Nobel Laureate in Economics says that De Soto has demonstrated in practice that titling hitherto untitled assets is an extremely effective way to promote economic development of society as a whole.

Margaret Thatcher, contributes by noting that, “The Mystery of Capital has the potential to create a new, enormously beneficial revolution, for it addresses the single qreatest source of failure in the Third World and ex-communist countries – the lack of a rule of law that upholds private·property and provides a framework for enterprise”.

A thriving market economy with an active role for the private sector is all that it takes for economies to develop. This is certainly the time to rethink our economic policy and include development law.

Written – March 24, 2005

Can The National Conference Provide A Legal Basis For A Brand New Constitution?

Featured

At last, the Sovereign authorities have accepted the need for a National Conference. Civil society in Nigeria has always insisted that only the People of Nigeria can authenticate, legitimize and endorse a Constitution to govern their affairs. Unfortunately, this simple wish was always denied by the colonial, military and even elected government. So President Goodluck Ebele Jonathan’s Independence Declaration is a major milestone.

The Late Aka-Bashorun, my most illustrious predecessor, as President of Nigerian Bar Association, the first to clearly articulate the need for a Sovereign National Conference, as long ago as the 1980’s, must be rejoicing in his grave. Civil society has always stated that a National Conference is a vital requirement for a People’s Constitution for Nigeria.

Civil society’s demands have always been straight forward and simple that Nigeria will benefit from a robust discussion on two vital questions posed by Late Bola Ige, when he said:

…there are two basic questions that must be answered by all of us Nigerians. One, do we want to remain as one country? Two, if the answer is yes, under what conditions?

I respectfully suggest that Bola Ige’s questions are well framed as the relevant National Questions we need to address, if we are to build a new Spirit of commitment to Nation and service to motherland.

President Jonathan has charged a committee to frame the issues and nature of participation, and most important the legal basis upon which the outcomes of a National Conference can be enacted into law by the National Assembly.

Civil Society on the other hand has expressed the view that the nature of the conference will necessarily have to be sovereign. I will return to the basis of this request by civil society.

What is important at this stage is the utilizing of the limited platform offered by President Jonathan to engage Nigerians in very robust discussions on the Constitution and without “No-Go” issues.

Even though there are challenges about participation, my suggestion is that participants may be drawn from ethnic nationalities and at least the six basic estates of the realm, namely the Executive, Legislature, Judiciary, Media, Civil society and Organized Business. I have defined civil society in a very broad sense to include NGO’s, religious and traditional institutions and of course labour, youth and women.

I agree with Dr. Tunji Abayomi when he said “Every Constitution is preceded by a debate of terms and consensus on principles”. This  simply means that we have to agree. I think the most important key to a successful National Conference is the structure of government and devolution of powers. It is obvious that Nigeria is a very diverse country. Scholars suggest that federalism is the political system best suited to diverse peoples. If this is agreed at the conference, the corresponding question should be about the structure of the federal system and the scope of powers of the autonomous governments, that is the federal government on the one hand and the state government and even the local government, on the other.

I would readily adopt Dr. Alex Ekueme’s recommendation that the new structure of Nigeria should be based on our six geo-political zones. I would further recommend massive devolution of powers from the Central government to the state governments. This is called the principle of subsidiarity. If we accept this basic conceptual framework, it will then be easy to constitutionalize the political arrangements into a Peoples constitution. 

Now to compensate for the non sovereign nature of the conference, I would like to identify four vital elements that we must keep in mind. They are inclusion, authority, validity and legitimacy.

By inclusion I mean every Nigerian must be allowed to freely speak his mind. By authority I mean that we have to accept that the President and National Assembly are the convening authority. By validity the government has to accept that we the People shall validate the Constitution by Referendum. By legitimacy I mean that our discussions shall not be altered by the government, but shall be final and binding and validated by Nigerians

I now turn to perhaps the most difficult subject of all in this matter of the National Conference. Here is the question – after we agree, how do we bring the discussions into legal force? I think Prof. Ben Nwabueze, SAN, has, as usual, provided a simple and lucid answer.

Prof. Nwabueze reminds us that the National Assembly has two types of legislative powers. First, the National Assembly has legislative power similar to that of any House of Assembly of a State. In this context the National Assembly is just one of three of the branches of the Federal Government. The National Assembly makes law in this field pursuant to its powers contained at Section 4(2) of the Constitution. These are the exclusive and concurrent lists. But the National Assembly has a second legislative power. This is covered by Section 4(1) of the 1999 Constitution. Prof. Nwabueze having noted that “Section 4(1) provides that legislative powers of the Federal Republic of Nigerian shall be vested in the National Assembly”, goes on to say that what is so vested in the National Assembly  therein, is the legislative power, not of the Federal Government, but that of the Federal Republic of Nigeria. The legislative power in this second field is a term wider than the legislative power of the National Assembly as a branch of the Federal Government. In short the National Assembly has dual power to make laws on the one hand as a branch of the Federal Government and on the other hand for the Federal Republic of Nigeria.

The National Assembly is authorized to make laws for the Federal Republic of Nigeria for its peace, order and good government. In this sense, according to Prof. Nwabueze, and I respectfully agree, the entire legislative sovereignty of the Federal Republic of Nigeria is vested in the National Assembly. It is important to state that the legislative power of the National Assembly to make law for the Federal Republic of Nigeria is not limited to matters specified in the exclusive and concurrent list. It includes, Prof Nwabueze says, and pursuant to Section 4(4)(b) “any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution”. It is in this context that the National Assembly can exercise powers pursuant to section 4(1) to repeal Decree 24 of 1999 which is the legal basis of the 1999 Constitution and replace it with a brand new Constitution. The legal position will be different if the National Assembly is merely altering the Constitution. This is covered by Sections 8 and 9.

Prof. Nwabueze cites the example of what Parliament did in 1963 when it replaced the whole of 1960 Independence Constitution with the Republican Constitution of 1963.  All Parliament did in 1963 was to repeal the Order-in-council, made by the Queen of England providing for the Independence Constitution and replaced it with a brand new Republican Constitution.

Decree 24 is an existing law under Section 315(4) of the 1999 Constitution. So Decree 24, being a law with respect to which the National Assembly has power under Section 4(1) to make law, is deemed to be an Act of the National Assembly and can therefore be repealed.

Prof. Nwabueze says it would be inconceivable and manifestly absurd that there should be an existing law as defined in Section 315(4) which is beyond the power of the legislative authority of the sovereign state of Nigeria to repeal.

So the way I see it is that, assuming we can agree on the content of the Constitution that can work for us, it should be very easy to constitutionalize the agreements reached at the National Conference by invoking the special legislative powers of the National Assembly and enacting those agreements reached into a supreme Constitutional document. If this process is followed, the Constitution as an outcome of the Sovereign will of the People will have the stamp and authority of Nigerians, validated by a referendum before enactment by the National Assembly. Then as Kingsley Moghalu says in his tremendously important book “Emerging Africa” we can all aspire to a Fundamental Transformational Agenda for Nigeria. 

Letter to the Senate President – A Call for a National Conference

Featured

Law

Senator David Mark
President of the Senate
National Assembly
Three Arms Complex
Abuja, FCT.
September 24, 2013
 

Dear Distinguished President,

RE: THE NATIONAL CONFERENCE
The Civil Society in Nigeria has always insisted that the People of Nigeria will have to authenticate, legitimize and endorse a Constitution to govern their affairs. Unfortunately this simple wish was always denied by the Colonial, Military and even “elected” Government. It was the Late Aka-Bashorun, my most illustrious predecessor as President of Nigerian Bar Association, who articulated the collective disappointment of Nigerians by the call for a Sovereign National Conference as long ago as the 1980’s. Civil Society in Nigeria has noted with mixed reaction your statement to Distinguished Senators, on the floor of the Chambers, that a National Conference is a vital requirement for a Peoples’ Constitution for this country. Although many within the civil society disagree or have expressed reservations about the so called “NO-GO” issues highlighted in your statement, it is commonly agreed that your Declaration forms an important new development in the quest for a legitimate Peoples Constitution.
 
Civil Society’s demands have always been straightforward and simple – That Nigeria will benefit from a robust full discussion on 2 vital questions asked by Late Bola Ige when he said “There are 2 basic questions that must be answered by all of us Nigerians. One, do we want to remain as one country? Two, if the answer is yes, under what conditions? I respectfully suggest that Bola Ige’s Questions are well framed as the National Questions we need to examine if we are to build a new spirit of commitment to Nation and service to Motherland.
 
CHALLENGES OF LOGISTICS
You alluded to the very difficult task of Organization and logistics of a National Conference. I accept that there are challenges but they can be overcome. Every stakeholder must give and take.
 
CONVENER
A possible platform for a national Conference will be set by President Jonathan convoking it and declaring it’s resolutions binding and subject only to a Referendum. This will give the conference confidence and integrity and compensate for matters related to the non Sovereign status of the Conference.
 
SCOPE/TERMS OF REFERENCE
In view of the very many conferences called and ending without result, but producing possibly relevant results, review of past conference resolutions should form part of the Terms of Reference. Further suggested terms of reference can be readily agreed.The Conference ought to consider structure of the Federation and massive devolution of powers not necessary at Federal level to state level.
It is of vital importance that the nature of our political arrangements are first discussed. The Conference’s task is not simply the drawing up of a Constitution. For example, couples first discuss personal arrangements and then solemnize by a marriage certificate. For Nigeria, we should discuss political arrangements first, then constitutionalize it by a legal document, that is the Constitution.
 
VITAL ELEMENTS OF A GOOD CONSTITUTION
I will like to draw attention to 4 vital elements of a good Constitution;
 
Inclusivity – Everybody must talk
Authority – We have to accept that President and/or National Assembly will be the Convening Authority
Validity – We, the people, shall validate the Constitution, by referendum. No one else.
Legitimacy – Our democracy can only be secured and deepened by a legitimate constitution validated by Nigerians.
 
PARTICIPANTS
It will be tasking to suggest that all 160 million of us can participate. My suggestion will be to draw from ethnic nationalities and the 5 estates of the Realm, namely Executive, Legislative, Judicial, Media and Civil Society. Civil Society is used in the broadest sense, to include NGO’s, Religious and traditional movements and of course Labour, Youths and Women.
 
NEW CONSTITUTION
We can enact for ourselves a new legitimate Constitution. This is the vital framework that will best manage our diversity and generate unity in diversity.
 
WE ARE READY
Civil Society is ready if you are, sir.
Please accept the assurances of my best wishes and high considerations.
 
Sincerely,
 
 
Dr. Olisa Agbakoba, SAN
 

COVID-19 in Nigeria: Time to Think Globally and Act Locally

Tags

, , ,

The Coronavirus disease (COVID-19), has exposed the fragility of the public health system of many countries. The global pandemic has precipitated fundamental disruptions that that will change the ways in which many things are done in the world forever. Nigeria is not left out.              

For Nigeria to handle COVID-19 successfully, especially in view of Nigeria`s weak public health system and paucity of funds, I need to make two overriding points: the need to depart from international strategy by developing a Nigerian Strategy in managing COVID-19 and diversification of the economy in view of dwindling oil revenue.

On the need for a Nigerian Strategy on COVID-19, I call on the federal government to interrogate available quinine medications and to engage Nigerian virologists & infectious diseases specialists, public health professionals and Traditional & Herbal medicine Institutions with a view to exploring local Nigerian solutions to COVID-19. This approach will also help to enhance the capacity of Nigerian Specialists. This is in line with the policy of promoting and utilizing local content.  I also call on the Federal government to develop a decentralized strategy for  COVID-19 by delegating and assigning some responsibility to State governments.

It is gratifying to note that the federal government has already initiated some measures including a lockdown policy. While commending the federal government for the COVID-19 measures taken so far, I am concerned with the sustainability of the lockdown policy in view of lack of social welfare system and scarce financial resources. I therefore call on the government to lift the strict lockdown restrictions and allow some flexibility so as to allow some level of work and economic activities within some parameters.

The strategy for diversifying the economy has been urgent and very important as part of the post COVID-19 economic strategy. To this end there is need to strengthen the agricultural and manufacturing sectors. The National Trade and Transportation policies need to be adopted, and so is the need for the enactment of trade remedy legislation. Nigeria also must take issues relating to digital economy seriously. A well developed digital economy will not only create millions of jobs, improve citizens` taxable income, and generate revenue for government, which directly increases government spending power. The federal government must ensure the implementation of the National Digital Economy Policy and Strategy Document 2020-2030.

I conclude by stating that the time has come for the federal government of Nigeria to adopt the policy of thinking globally and acting locally in solving the COVID-19 problem. What we need is home-grown Nigerian solution independent of the efforts being made in developed countries. While the West has the resources for a total lockdown we must adopt our Nigerian COVID-19 Strategy to suit local and Nigerian situation.

Letter to President Buhari on 2020 Budget and Key Fundamentals

Tags

, , ,

Dear Mr. President,

KUDOS FOR ON TIME BUDGET PRESENTATION BUT MISSING FUNDAMENTALS REMAIN.

I applaud the unusual departure of the Government of Nigeria by laying the budget estimates in good time and the reciprocity of the National Assembly to pass the estimates in 2019!!!! This is record breaking, but alas, this is only as good as can be said of the budget estimates.

In a country of 200 million and 50% living in poverty, the budget reflects many missing fundamentals. The starting point with this budget is a diagnosis of our condition. I would diagnose that Nigeria is afflicted with malignant metabolic economic syndrome complicated by high inflation, high interest rates, mass unemployment, weak infrastructure, slow growth, unclear borrowing policy, unaccountable subsidy, etc..

To turn things around, I like to assume that you have charged the new Economic Advisory Council to give us short and immediate solutions. Working from my diagnosis of Nigeria’s economic disease, we need to work out a macro-economic development framework that lays out a harmonized fiscal, monetary, investment, legal, institutional and regulatory agenda. Fiscal policy or rate at which government spends, must be dramatically expansionary. We cannot have an anemic budget of N10 trillion Naira for 200 million Nigerians, which is equivalent to N50,000 per person, per annum. This will keep us in poverty abysmal when we need double digit growth!

On the basis of a GDP of 400 billion Dollars, the baseline annual budget should be 20% which approximates 20-30 trillion annual spend rather than the miserly 10 trillion budget. Our annual spend is anemic and we have to infuse large money. For monetary policy, we need urgent quantitative easing, which is easing of all interest rates in particular to slack the heavy burden of high interest rates on lending afflicting long suffering Nigerians. We must be very proactive to look for new funds.

Traditionally, public revenue has depended on tax and oil receipts but there are far too many other sources- the Maritime sector is laden with cash, agriculture and the blue ocean, trade, the real sector, and controversial as it may appear, revenue that can be derived from new legislation on immunity from criminal prosecution. Government must consider legislation on criminal immunity to those who have plundered us, and we will likely see massive inflows of our money in foreign banks back to us. At present, the money is out of our reach anyway! I estimate 100 billion Dollars will flow back if we grant immunity from criminal prosecutions but with civil sanctions.

Engagement of the private sector in partnerships will yield a massive stock of revenue.  We need our Dangotes, Jim Ovias, Mike Adenugas, Innosons to be involved, just like the Chaebols of South Korea. I know that the Onitsha Nnewi Ogidi market axis can generate up to 10 trillion Naira if the proper incentives are offered.

Foreign and domestic investments in infrastructure is possible if the proper legal institutional and regulatory environment is established. Public revenue will be enhanced by at least 3 trillion Naira if we rebase foreign exchange rates from N305 to N360 and remove fuel subsidy at once.

Additionally, we must review public expenditure. Far too much money is consumed by recurrent receipts. Downsizing government is a task that needs immediate attention by implementation of the Oronsaye report. Our public sector borrowing requirement needs review so that our revenue to debt ratio is less than 30%. Banks must focus on their primary function of lending not trading as we have seen in purchase of Treasury bills in excess of 400 billion Naira. Tax collection efficiency and not increase should be the the policy and Chairman Coker of FIRS and Governor Emefiele of CBN are 2 public servants deserving special mention for their innovation.

As an expert in Shipping and hydrocarbons, I query why government only sees dollars from a barrel of crude when the value chain has at least 34 soft and hard by-products other than crude oil. In my field, there is banking, shipping, legal and insurance, but very little of the cash from this value chain from crude oil stays in our economy. We need to reset the clock. I will assume that that the budget estimates is just the start of a turn around process of economic transformation.

Having held their meeting with you, can the Economic Advisory Council give us a short turn around plan to create jobs, opportunities and double digit growth? A good plan can create 10 million jobs annually, open the economy, expand local production and put the economy into double digits and pull millions out of poverty in addition to good education and healthcare.

Dr. Olisa Agbakoba (SAN)

Letter to President Buhari: The Need For an Executive Order on a National Arbitration Policy

Tags

, , ,

September 2, 2019

Your Excellency,

NEED FOR AN EXECUTIVE ORDER ON A NATIONAL ARBITRATION POLICY

I refer to the recent enforcement order of US$9, 000, 000, 000 (Nine Billion US Dollars) made against Nigeria, by an English High Court, which was based upon an arbitration award secured by a company, Process and Industrial Developments Limited (P&ID). This monumental award secured by a foreign company against Nigeria has grave far-reaching implications for the country, considering that it represents almost 20% of our foreign reserves, and 25% of our national budget. I write purely out of concern for National interests. This incident would have been avoidable, if the advocacy for a National Arbitration Policy had been embraced over twenty years ago.

I recommend an immediate and urgent audit as we are aware that there are a significant number of arbitral awards made against Nigeria.

A National Arbitration Policy promotes national interest by ensuring that the resolution of disputes between Nigeria and foreign investors in relation to government contracts will be determined by institutional arbitration mechanisms, which will have the seat of arbitration in Nigeria. Please note that some countries have already enacted National Arbitration Policies. 

Going forward, I suggest that we establish a National Arbitration policy, represented by an enactment of an Executive Order that will commence the process and procedure of creating the policy. This will ensure that Nigeria’s interests are protected in its commercial relationships with foreign investors.

Thank you.

Yours faithfully.

Dr. Olisa Agbakoba SAN

Accountability for Public Funds at Local Governments; Re: Olisa Agbakoba v Minister for Finance

Tags

, , ,

Dr. Olisa Agbakoba filed a Suit at the Federal High Court, to stop allocation of public funds to unelected and unaccountable Local Government Councils, running into Trillions of Naira.

The basis of the Case is that Section 7(1) of the 1999 Constitution guarantees a system of democratically elected Government Councils. But Local Government Councils in Nigeria are never elected and are unconstitutional. Allocation of public funds to them is a violation of the Constitution, as there is collusion with State governments in the use of trillions of Naira of Public Funds.

Dr. Agbakoba’s Case raises concern that unelected persons have unimpeded access to huge monthly allocations that are actually funds intended for democratically elected Local Government Councils, as guaranteed by Section 7 of the Constitution.

Dr Agbakoba noted that Nigeria operates democratically elected governments at all levels. The current situation where most of the 774 Local Governments are unelected is not only are unconstitutional but meant no development at the Local Governments.

Dr Agbakoba also noted that corruption is widespread in Nigeria because unelected persons that are not accountable to the electorate have received trillions of Naira of Public Funds.

Although the Federal High Court denied the Case, it appears that Dr. Agbakoba’s concerns has found support with guidelines recently issued by the Nigerian Finance Intelligence Unit (NFIU), which directs State Governors and Local Governments to follow the Constitution regarding disbursement of Local Government funds. Obviously, the new NFIU’s guidelines, like Dr. Agbakoba’s Case, will uphold accountability of Public Funds at Local Government Level.

Comments made by: Niyi Odunmorayo (Media Assistant)

2019 PRESIDENTIAL ELECTION: ETHNIC CONSIDERATION VS. GOVERNANCE CONSIDERATION

The voting pattern for the 2019 Presidential Election shows ethnicity played a significant role in the Election.  President Muhammadu Buhari kept his base in the North while former Vice President, Atiku Abubakar largely held his base in the South. Both All Progressive Congress (APC) and Peoples Democratic Party (PDP) benefited from primordial voting. The excepted zone is the South-west where voting occurred on the basis of issues. 

The significance and consequence of the 2019 Presidential Election are huge unless we are able to reverse it. 2023 will follow the pattern of 2019 unless we do something about it. I understand the PDP is aggrieved about the outcome of the Election and alleged massive irregularities. I urge Former Vice President, Atiku Abubakar not to approach the Election Petition Tribunal.  He might have moved backwards by his loss but he should not lose sight of the legacy and greatness that lies in front of him.

Former Vice President, Atiku Abubakar is in a strong position to take up the mantle of a statesman. He can build a new Nigeria movement from the motley of small parties, third force actors, change actors and millions who are desperate for a strong, united Nigeria. There is also a lot of work to be done in both political and electoral reforms. I request Former Vice President, Atiku Abubakar to step into the shoes.

This is not to say I do not recognize the massive irregularities in the 2019 Presidential Election. I can see how tempting it is to take the option of the Election Petition Tribunal but that in my view is not the right decision. We look forward to a new Nigeria, strong and united; a new Nigeria that will not vote on the basis of ethnic and primordial sentiments.

As I said, I was shocked at the strength of the two parties in holding their respective bases. But the problem was that the basis was simply primordial and not driven by issues. Nigerian politics must appeal to issues and not ethnic or primordial consideration. This is the biggest danger in the 2019 Presidential Election and we as Nigerians must stand up to redress it.

February 27, 2019.