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Rivers wins as court stops FG from illegal deductions from federation account

Published

3 years ago

January 26, 2022

A Federal High Court in Abuja on Wednesday stopped the Federal Government from further making deductions from the Federation Account to fund its own agencies not listed in the 1999 Constitution for direct allocation..

The court declared as illegal, unlawful and unconstitutional the direct allocations made so far by the government from the Federation Account to fund the Nigeria Police Trust Fund.

Delivering Judgment in a suit instituted by the Rivers State Government to challenge the unlawful deductions from the Federation Account, Justice Ahmed Mohammed held that Section 161 and Section 162 of the 1999 Constitution were glaringly breached by the Federal Government in making direct allocation to the Police Trust Fund from the Federation Account.

The judge specifically held that Section 162 of the 1999 Constitution is clear and unambiguous to the effect that only the federal, state and local governments shall be allocated funds directly from the Federation Account.

The court also held that Section 4 of the Nigeria Police Trust Fund Act 2019 relied upon by the government to justify the unlawful deductions from the Federation Account is inconsistent with Section 162 of the 1999 Constitution which recognizes only the federal, states and LGs.

Justice Mohammed while upholding that the suit of Rivers State against the unjust deduction had succeeded, ordered that the fund belonging to Rivers but used to fund Nigeria Police Trust Fund by the Federal Government be refunded to the state.

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

The court upheld all arguments of a former President of the Nigerian Bar Association, Joseph Daudu (SAN), who stood in for Rivers State that where the provisions of the 1999 constitution are clear and unambiguous, they must be given their ordinary meanings

Justice 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 Nigeria Police was established for the Federal Government alone and as such the funding was solely on the shoulders of the Federal Government.

The Rivers State Government had in a suit marked FHC/ABJ/CS/511/2020 and instituted on its behalf by Daudu challenged the decision of the Federal Government allocating funds directly from the Federation Account to fund some of its agencies claiming that the decision violated Section 162 of the 1999 constitution.

The Rivers State Government had also claimed that by the Federal Government’s unlawful action, it had deprived it (Rivers) substantial revenue from the Federation Account and therefore prayed the court to nullify unlawful fund allocations from the Federation Account.

The plaintiff also claimed that the levies imposed on companies operating in Nigeria by the Federal Government to be paid directly to the Nigeria Police Force Trust Fund instead of the Federation Account were also illegal, unlawful and unconstitutional because it had also deprived it of substantial revenue accruable to the state as taxes.

The judge agreed with the plaintiff that under the relevant laws, such levies are supposed to be paid directly to the Federation Account and not to any Federal Government agencies.

Justice Mohammed said, “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 states that the Federal Government, state governments and LGs shall derive direct fund allocation from the Federation Account”.

The Attorney-General of the Federation and Minister of Justice, Accountant-General of the Federation, Revenue Mobilization Allocation and Fiscal Commission and Minister of Finance had been listed as defendants in the suit.

However, only the Attorney General of the Federation filed 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 grounds that such a suit ought to be filed directly at the Supreme Court.

However, the preliminary objection was dismissed by Justice Mohammed on the grounds that it was misplaced, absurd and lacking merit..