The Federal High court in Abuja, on Wednesday, barred the federal government from further making deductions from the federation account to fund the Nigeria Police Trust Fund (NPTF) or other institutions not listed in the Nigerian constitution.
The PTF is not a creation of the Nigerian constitution, but that of the National Assembly through the enactment of the Nigeria Police Trust Fund (Establishment) Act which came into force in 2019.
Sections 4(1)(a) and 4(1)(b) of the law permits the deduction of 0.5 per cent of the total revenue accruing to the Federation Accounr to be paid to the NPTF to boost the funding of the Nigerian Police Force.
The Federation Account Allocation Committee (FAAC) had announced at its April 2020 meeting that the deductions were to commence in earnest.
But about a month after the FAAC meeting, Governor Nyesom Wike-led Rivers State Government filed its suit on May 20, 2020 to challenge the planned deductions and the law on which it was premised.
The Rivers State Government, through its Attorney-General of the Federation, challenged what it described as the unlawful deductions being made from the federation account, jointly owned by the federal, state and local governments, to fund the NPTF.
It contended that it was not the responsibility of the state governments, but that of the federal government to fund the police.
It urged the court to order a refund of the money deducted from the Federation Account and paid into the NPTF since when it was informed about it at the FAAC meeting of April 2020.
Judgement
Delivering judgement in the suit, Ahmed Mohammed, the judge, declared as “illegal, unlawful and unconstitutional,” the direct allocations made so far by the federal government from the federation account to fund the NPTF.
Mr Mohammed held that Section 161 and Section 162 of the 1999 Constitution were breached by the federal government in making direct allocations to the NPTF from the Federation Account.
He added that Section 162 of the 1999 is 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 is inconsistent with section 162 of the 1999 Constitution which recognises only the federal, states and local governments.
It also agreed with the plaintiff that the levies imposed on companies operating in Nigeria by the federal government to be paid directly to the NPTF instead of the Federation Account was also illegal, unlawful and unconstitutional.
The Rivers State government had argued that such levies ought to be paid to the federation account for it to be benefit from it.
It said failure to pay such funds into the federation account and rather into the NPTF has deprived it of substantial revenue accruable to the state as taxes.
Refund
While upholding that the plaintiff’s suit, the judge ordered that the funds belonging to Rivers State but were used to fund the NPTF 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 and that the Rivers State as the plaintiff in this matter did not file it on behalf of others.
The court upheld all arguments of Joseph Daudu, a Senior Advocate of Nigeria (SAN), who stood for Rivers State that where the provisions of the 1999 Constitution are clear and unambiguous, they must be given their ordinary meanings.
The court also agreed with Mr 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 is solely on the shoulder of the federal government.
Suit
Rivers State in a suit marked FHC/ABJ/CS/511/2020 and instituted on its behalf by Mr Daudu, a former President of the Nigerian Bar Association (NBA), 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 also claimed that by the federal government’s unlawful action, it had deprived it substantial revenue from the federation account, and therefore prayed the court to nullify the unlawful funds allocation from the federation account.
Defendants in the matter are the Attorney General of the Federation and Minister of Justice AGF, Accountant General of the Federation, Revenue Mobilization Allocation and Fiscal Commission and Minister of Finance.
AGF’s defence dismissed
Only the Attorney General of the Federation filled processes to defend the federal government’s action.
But the judge dismissed the preliminary objection before going ahead to deliver the verdict.
The court held that the jurisdiction of the Supreme Court can only be invoked when a dispute involves the federation and any of the component states.
On the objection raised by the AGF that the Rivers State government ought to have sought and obtained the leave of the Federal High Court before instituting the suit, the judge said the plaintiff had no reason to seek the court’s permission to file the case.
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