House Rejects Bid to Transfer Sovereign Wealth Fund to Finance Ministry

The House of Representatives at the plenary yesterday rejected the bill seeking to repeal the Nigeria Sovereign Investment Authority (NSIA) Act, 2011 and transfer its assets and liabilities to the Ministry of Finance Incorporated.

The proposed legislation titled: “A Bill for an Act to Repeal the Nigeria Sovereign Investment Authority Act and Transfer the Assets and Liabilities to the Ministry of Finance Incorporated; and for Related Matters” was sponsored by Chairman, Public Accounts Committee, Hon. Wole Oke.

Leading the debate on its general principles, Oke explained that all funds currently in the custody of the NSIA should be transferred to the Federation Account and all investments made by the NSIA should be managed by the Ministry of Finance Incorporated, established pursuant to the Ministry of Finance Incorporated Act.

Listing the lapses with the NSIA Act, the lawmaker made reference to the provisions of Section 162(1) of the Constitution, which stated that payments of all revenues of the federation should be paid into the Federation Account, said the passage of the NSIA Act was first a breach of this provision of the Constitution and this contention had remained open for a very long time.

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He also referred to the NSIA as an agency of government that has failed, and blatantly refused, to submit its spending to the appropriation powers of the National Assembly.

According to him, a number of times, the various House Committees on Finance had engaged with the management of the NSIA on the need to comply with this constitutional procedure but they have arrogantly and flagrantly declined.

He stated that the implication of this is that the NSIA has gone to spend from the commonwealth of the nation without the authorisation of the Nigerian people, hence the need to put a stop to the waste and destruction of the future of Nigerians.

He, therefore, urged his colleagues to allow the bill scale through second reading, so that they could carry out a very comprehensive work, invite members of the public to speak on whether NSIA contravened Section 162 of the 1999 Constitution.

Oke said: “The provisions of the Constitution of the Federal Republic of Nigeria is very clear as to the procedure for withdrawal of funds from the Consolidated Revenue Funds and the condition precedent that appropriation must be made before any fund is released.

“Notwithstanding the provisions of Part III of the NSIA Act, particularly Sections 29 to 34 of the NSIA, which make statutory prescriptions as to the ownership and revenue sharing principles to be followed in distribution of proceeds from the fund, the management of the NSIA has been arbitral in their disbursement and distribution of funds and often times, do not even allocate and disburse funds to the state and local governments.

“One of our decisions in 2011 is to set up a body called the NSIA to among other things, manage, save resources for Nigerians. Some of these functions are already been performed by Central Bank of Nigeria.

“Aside that, the point I’m making today, which I want the parliament to look at, is whether this decision of ours to set up this body conform with the Section 162 of the Constitution of the Federal Republic of Nigeria. One of the windows which the parliament can correct itself is to repeal or amend an existing Act.

“And that’s why I’m here today. I want us to read Section 162 of the Constitution, vis a vis the Act we passed to set up this body.”

Shortly after his debate, while few lawmakers supported the bill, several others opposed it, calling for sanctions and increased oversight instead of repealing the NSIA Act.

Hon. Henry Nwawuba, expressed the view that Sovereign Wealth Fund has its benefits, which should be considered.

Nwawuba said: “I want to state on record that there’s a benefit of having a Sovereign Wealth Fund, which must have been the reason Nigeria decided to save for rainy day. It should be taken into consideration as we debate on this. We should look at merits and demerits.”

Also, Hon. Ayokunle Isiaka opined that the lawmakers should find out if the sovereign investment fund, which was created by the parliament to serve some peculiar purposes, is living up to expectations rather than repeal or merge it with another ministry.

On her part, Hon. Lynda Ikpeazu faulted Oke’s assertion that it contravenes Section 162 of the Constitution.

Ikpeazu said: “The sponsor made a reference to Section 162 of the Constitution. But when you look at 162(3,4), you will find out that this parliament set up this fund. Now that’s not to say we can’t repeal, but what I’m saying is that it doesn’t offend it. It’s important for us to look at the intendment behind actually making that law, and understand why it was set up in the first place then we take a decision.”

Corroborating, Hon. Chris Azubogu urged the sponsor to step the bill down, warning that it is in the greater interest of the nation not to project and portray Nigerians in a light that is not acceptable internationally.

Azubogu said: “I appeal to the sponsor Hon. Oke, it is in the greater interest of the nation so we don’t project and portray Nigerians in a light that’s not acceptable internationally. Sovereign Wealth Fund as an institution has been involved in sourcing funds globally and a lot people have had some trust to do business with Nigeria based on that.

“Let us step down this bill and do further consultation, engage. The agency does not do proper reports to National Assembly, going forward we will give them chance to come and explain to us what they are doing. If there are things we need to amend in the Act to make them more responsible to National Assembly we will do that than repealing it.”

When put to a voice vote by the Deputy Speaker, Hon. Idris Wase, who presided over the session, majority of the lawmakers voted against the bill.