Attorney-general Of Abia State & Ors V Attorney-general Of The Federation (2003)

LAWGLOBAL HUB Lead Judgment Report

S.M.A. BELGORE, J.S.C.

This is a suit in the original jurisdiction of this court brought by virtue of Section 232 of the Constitution of the Federal Republic of Nigeria, 1999 (hereinafter referred to as the Constitution). The Plaintiffs are the Attorneys-General of all the thirty-six states of Nigeria who, on behalf of their respective states, brought this action against the Attorney-General of the Federation representing the Federal Government of Nigeria. The grouse of the plaintiffs is the Statutory Instrument No. 9 of 2002 wherein the President of the Federal Republic of Nigeria, Chief Olusegun Obasanjo, made an order modifying the Allocation of Revenue (Federation Account Etc.) Act, 1990 as amended by Allocation of Revenue (Federation Account, Etc.) Decree (No. 106) of 1992. By the 1992 Decree (No. 106), Sections 1, 2, 3 and 4 of the principal Act were amended. It is the principal Act as amended by Decree 106 of 1992 that has now been modified. This order is now challenged.

The Constitution in Section 162(1) provides:

“162(1)The Federation shall maintain a special account to be called “The Federation Account” to which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”

And in subsection (2) of the same Section 162 the Constitution provides:

(2)The President, upon the receipt of advice from the Revenue Mobilization, Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles especially those of population, equality of states, internal revenue generation, land mass, terrain as well as population density:

Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen percent of the revenue accruing to the Federation Account directly from any natural resources.

The President relying on Section 315 of the Constitution, especially subsections (1)(a), (2) and (4)(a)(i) thereof made the Order now in issue i.e. Allocation of Revenue (Federation Account Etc.) Order, 2002 on 8th day of May, 2002, and thereby altered the existing formula in the principal Act as amended by Decree 106 of 1992. The law as it existed before 8th May, 2002, provided allocation formula inter alia as follows in Section 1(a) to (e):

“(a) the Federation Government……. 48.5%

(b) the State Government……………. 24%

(c) Local Governments………………. 20%

(d) Special Funds………………………. 7.5%

(i) Federal Capital Territory, 1% of the Federation Account

(a) Development of the mineral producing areas…. 3% of the revenue accruing to Federation Account derived from minerals

(b) General ecological problems …. 2% of the Federation Account

(c) Derivation … 1% of the revenue accruing to the Federation Account derived from universals

(d) Stabilisation Account …. 0.5% of the Federation Account, plus the revenue arising out of using mineral revenue, instead of the Federation Account, as the base for allocation to the fund for development of the mineral producing areas and derivation.”

By the Order now in issue it is provided inter alia as follows:

“Allocation of Revenue (Federation Account, Etc.) (Modification) Order, 2002

Commencement: 29th May, 1999

In exercise of the powers conferred upon me by subsections (1)(a), (2) and (4)(a)(i) of Section 315 of the Constitution of the Federal Republic of Nigeria, 1999 and of all other powers enabling me in that behalf, I, OLUSEGUN OBASANJO, President of the Federal Republic of Nigeria, hereby make the following Order:-

1. The Allocation of Revenue (Federation Account, Etc.) Act in this Order (referred to as “the principal Act”) as amended, is hereby further modified as provided in this Order.
2. Section 1 of the principal Act is hereby modified by substituting therefore the following:
3. The amount standing to the credit of the Federation Account, less the sum equivalent to 13 per cent of the revenue accruing to the Federation Account directly from any natural resources as a first line charge for distribution to the beneficiaries of the derivation funds in accordance with the Constitution shall, be distributed among the Federal and State Government and the local government councils in each State of the Federation on the following basis, that is to say –

(a) the Federal Government 56.00 per cent;

(b) the State Governments 24.00 per cent;

(c) the Local Government

Councils 20.00 per cent.

3. Section 2 of the principal Act is modified by substituting for subsections (1) and (2) thereof the following new subsections :-

2(1) The 56.00 per cent specified in Section 1(a) of this Act shall be allocated to the Federal Government and utilized as follows:-

(a) Federal Government – 48.50 per cent;

(b) General Ecological

Problems – 2.00 per cent;

(c) Federal Capital

Territory – 1.00 per cent;

(d) Stabilisation Account – 1.50 per cent

(e) Development of

Natural Resources – 3.00 per cent

(2) The 24.00 per cent standing to the credit of all the States in the Federation Account as specified in Section 1(b) of this Act shall be distributed among the States of the Federation using the factors specified in this Act.

4. Section 3 of the principal Act is modified by substituting therefore the following new section:-
5. Subject to the provisions of this Act, the amount standing to the credit of local government councils in Federation Account shall be distributed among the States of the Federation for the benefit of their local government councils using the same factors specified in this Act.
6. In this Order, unless the con otherwise requires:-

“Constitution” means the Constitution of the Federal Republic of Nigeria, 1999;

“Federation Account” means the Federation Account established under Section 162(1) of the Constitution.

6. This Order shall be cited as the Allocation of Revenue (Federation Account, Etc.) (Modification) Order, 2002 and shall be deemed to have come into force on 29th May, 1999.

MADE at Abuja this 8th day of May, 2002.”

The Order contains an Explanatory Note at the end , but by normal construction of statutes it is only what it says, because it is not part of the statute. Therefore what is before this Court is the substantive Order quoted above by me. The plaintiffs’ case is that the Order is a direct nullification of this Court’s decision in suit No. SC. 28/2001 Attorney-General of Abia State and 35 Ors. v. Attorney of the Federation (2002) 3 S.C. 106; (2002) 6 NWLR (Pt. 762) 542, wherein this Court held inter alia as follows:

“(i) Funding of joint venture contracts and the Nigerian National Petroleum Corporation priority projects cannot, by any stretch of construction, come within Section 162(3) of the Constitution which provides for the distribution of the Federation Account among the three tiers of government, that is Federal States and Local Government. Therefore all those charges on the Federation Account are inconsistent with the Constitution and are therefore, invalid.

(ii) It has transpired also that other deductions are being made from the Federation Account in respect of monies paid to the National Judicial Council for funding the Federal and State Judiciaries; for servicing external debts and for funding Joint Venture Contracts and Nigerian National Petroleum Corporations Priority Projects. All these deductions are carried out as first line charges on the Federation Account. All the deductions are not provided for by the 1999 Constitution, notwithstanding the provisions of Section 162 subsection (9) in the case of the National Judicial Council, so that even if any enactment has provided for them, like the Appropriation Act by the National Assembly, such enactment is inconsistent with the Constitution and is therefore invalid to the extent of the inconsistency. Sections 3 and 4 of the General Loans and Stock Act, Cap. 161, which the Plaintiff relies upon to support deductions from the Federation Account for servicing foreign debts falls under this category.

Section 314 of the Constitution, which the Plaintiff relies upon does not, in my opinion, provide justification for making the deduction from the Federation Account. The section provides:-

‘314 Any debt of the Federation or of a State which immediately before the date when this section comes into force was charged on the revenue and assets of the Federation or on the revenue and assets of a State shall, as from the date when this section comes into force, continue to be so charged’. I think the charge to the revenue of the Federation or the revenue of a State simply means a charge to the Consolidated Revenue of a State into which monies received from the Federation Account are credited.

(iii) The appropriate authority in respect of the Allocation of Revenue (Federation Account, etc) Act, Cap. 16, Laws of the Federation, 1990 (as amended) is the President. Thus, the President has the constitutional power, by order, to modify Cap. 16 either by way of addition, alteration, omission or repeal to bring it into conformity with the Constitution.

(iv) The correct position, in my respectful view, is that Cap. 16 (as amended by Decree 106 of 1992) provides the formula to be used for the purpose of revenue allocation pending a time the National Assembly comes up with a formula as directed by the Constitution. Cap. 16 is, however, only applicable in so far as it is not inconsistent with the provisions of the 1999 Constitution”.

Also, it is the contention of the plaintiffs that the President has no power, constitutional or statutory to issue the said Order “with particular regard to paragraphs 2(1)(a) and 3 thereof.” The plaintiffs contend that the Constitution in S. 315 thereof has limited the power, which is now exceeded, to make the Order. It is therefore pertinent to set out what Section 315 of the Constitution provides:

“315.-(1) Subject to the provisions of this Constitution, an existing law shall have effect with such modifications as may be necessary to bring it into conformity with the provisions of this Constitution and shall be deemed to be –

(a) an Act of the National Assembly to the extent that it is a law with respect to any matter on which the National Assembly is empowered to make laws; and

(b) a Law made by a House of Assembly to the extent that it is a Law with respect to any matter on which a House of Assembly is empowered by this Constitution to make Laws.

(2) The appropriate authority may at any time by Order make such modifications it the of any existing law as the appropriate authority considers necessary or expedient to bring that law into conformity with the provisions of this Constitution.”

And in subsection (3) it provides:

“(3) Nothing in this Constitution shall be construed as affecting the power of a court of law or any tribunal established by law to declare invalid any provision of an existing law on the ground of inconsistency with the provision of any other law, that is to say:-

(a) any other existing law

(b) a law of a House of Assembly

(c) an Act of the National Assembly, or

(d) any provision of this Constitution.”

The subsection (4) thereof then says the expression “appropriate authority” means the President in relation to any law of the Federation or the Governor of a State in relation to an existing law deemed to be made by the House of Assembly of that State, or any person appointed by law to revise or rewrite the laws of the Federation or of a State.

The plaintiffs in respect of this suit raised the following Issues for Determination

“Whether S.315 of the Constitution of the Federal Republic of Nigeria, 1999 authorises the President to amend the Allocation of Revenue (Federation Account, Etc.) Act, Cap. 16. Laws of the Federation of Nigeria, 1990, as amended by the Allocation of Revenue (Federation Account, Etc.) (Amendment) Act, 1992 in the manner and to the extent contained in paragraphs 2(1)(a) and 3 of the Allocation of Revenue (Federation Account, Etc.) (Modification) Order, 2002”

The Defendant raised the following issues:

“(i) whether paragraphs 2(1)(a) and 3 of the Allocation of Revenue (Federation Account Etc.) (Modification) Order, 2002 made by the President on the 8th day of May, 2002 are not constitutional.

(ii) whether paragraphs 2(1)(a) and 3 of the Allocation of Revenue (Federation Account Etc.) (Modification) Order, 2002 made by the President of the Federal Republic of Nigeria are not contrary to and in disobedience of the judgment of this Honourable Court in Suit SC/28/2001 between Attorney-General of the Federation v. Attorney-General of. Abia State and 35 Ors. (2002) 4 S.C. (Pt. 1) 1; (2002) 6 NWLR (Pt. 764) 542 delivered on Friday, 5th April, 2002.”

The plaintiffs’ argument is that the President of Nigeria has trespassed into the realm of powers essentially belonging to the legislature i.e. the National Assembly, because what he has done by the Order now being challenged is legislating. According to them (plaintiffs) in a constitutional democracy like Nigeria, the powers of government are categorized into three, i.e. the “Legislature, Executive and Judicial” each of which “is vested in a separate and distinct department/arm of government”. In this regard, the Executive power is to administratively implement the policies of governance made by National Assembly into Laws. The National Assembly is to make the laws but the implementation of the laws is vested in the Executive. The judiciary is to interpret the laws. The Executive powers are vested by S.5 of the Constitution in the President; the Judicial powers are vested by S.6 thereof in the Courts established for the Federation. The legislative powers, by virtue of S.4 of the Constitution are, vested in the National Assembly for laws within its competence and in the House of Assembly of a State for laws within its competence to make.

One wonders, therefore, how the President or Governor in the case of State, can modify a law within the competence of the legislature. It looks anomalous except for the circumstance of our Constitution. The Constitution is the supreme law of this country; without it no law can independently exist.

It is very clear in Section 1 of the Constitution where it is provided:

“1.(1) This Constitution is supreme and its provisions shall have binding force on all the authorities and persons throughout the Federal Republic of Nigeria”

and to emphasize this supremacy it provides in subsection (3) of Section 1:

“(3) If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall to the extent of the inconsistency be void.”

The principle behind the concept of Separation of Powers is that none of the three arms of government under the Constitution should encroach into the powers of the other. Each arm – the Executive, Legislative and Judicial – is separate, equal and of coordinate department and no arm can constitutionally take over the functions clearly assigned to the other. Thus the powers and functions constitutionally entrusted to each arm cannot be encroached upon by the other. The doctrine is to promote efficiency in governance by precluding the exercise of arbitrary power by all the arms and thus prevent friction. If viewed in the above perspective one may easily frown on what Section 315 of the Constitution has provided. But our Constitution is a product of our own circumstance, and the like of Section 315 (supra) has lived with us all along. Similar provisions were in Independence Constitution of 1960 but the exercise of it was limited to only six months of its existence because it was under Transitional Provisions. The Republican Constitution of 1963 limited it to three years. It is obviously now deliberate that Section 315 has no limited time.

It must be pointed out that no two democratic constitutions are the same. Our own constitution has its peculiarities due to our historical circumstance. Without the provisions of S. 315 of our 1999 Constitution, and with this Court’s judgment in Attorney-General of the Federation v. Attorney-General of Abia State & 35 Ors. (supra) the country might easily find itself operating an unconstitutional revenue allocation statute. The President sent to National Assembly a bill on Revenue Allocation which has not been passed into an Act of National Assembly. There was hardly a better time to invoke his power of modification. The provision is a part of our supreme law, the Constitution and its consequence is clear. In the case of Attorney-General of the Federation v. Attorney-General of Abia State & 35 Ors. (2002) 4 S.C. (Pt. I) 1; (No.2) 6 NWLR (Pt. 764) 542, 755 – 757 this Court held that the purport of S. 162(3) of the Constitution is that the formula for share or allocation of revenue as in Allocation of Revenue (Federation Account etc) Act, 1990, as amended by Decree No.106 of 1992, is in direct contradiction to the Constitution, S. 162 (3) which states:

“Any amount standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the local government councils in each State on such terms and in such manner as may be prescribed by the National Assembly”

Therefore by providing for special funds enumerated in the Act (as amended) for:

Special Fund:

i. Federal Capital Territory

ii. Development of the Mineral producing areas

iii. General ecological problems

iv. Derivation

v. Stabilization Account

the Act went beyond what the Constitution provided.

The Act has gone beyond what was constitutional and the items set out under Special Fund are against the Constitution. S. 162(2) provides that once the President receives advice from Revenue Mobilisation Allocation and Fiscal Commission, the Executive body charged with advising on revenue allocation, he shall table before the National Assembly “proposals for revenue allocation from the Federation Account.” The parties admit the President has tabled the proposals before the National Assembly and up to now nothing has come out of it. The law as it is i.e. Chapter 16, Laws of the Federation of Nigeria, 1990 as amended by Decree No. 106 of 1992, has been rendered unconstitutional in part by this Court’s decision in Attorney-General of the Federation v. Attorney-General of Abia State & 35 Ors. (supra) therefore, the President’s only option was to invoke his powers under S. 315(1) of the Constitution and modify the Act to bring it into conformity with the Constitution. This, the President has done.

It is noteworthy that the Constitution, itself, has defined “appropriate authority” for the purpose of an Act of National Assembly for modification as the “President.” It also defines “modification” as follows in S. 315(4)(c):

“315(4)(c) ‘modification’ includes addition, alteration, omission or repeal.”

Thus the President has wide power when modifying any existing law to bring it in conformity with the Constitution. It is true that “separation of powers” is essential to a healthy democracy, the power given the President and also to State Governors in existing law of the State by the Constitution is not an abuse of the principle or doctrine of separation of powers, it is essential to giving meaning to an existing law so that the Constitution itself is not abused.

I therefore hold that the exercise of the power to modify the allocation formula in the existing Allocation of Revenue (Federation Account Etc.) Act (Cap. 16, Laws of the Federation of Nigeria, 1990) as amended by Allocation of Revenue (Federation Account Etc) (Amendment) Decree (No. 106 of 1992) is constitutional and within the scope of his right under the Constitution. Except in military regime, the supreme law is the Constitution itself. That is why this is stated clearly in Section 1 of the Constitution of 1999 as follows:-

“1. -(1) This Constitution is supreme and its provisions shall have binding force on all authorities and persons throughout the Federal Republic of Nigeria.

(2) The Federal Republic of Nigeria shall not be governed, nor shall any person or group of persons take control of the Government of Nigeria or any part thereof, except in accordance with the provisions of this Constitution.

(3) If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall to the extent of the inconsistency be void.”

Therefore the declaration sought by the plaintiffs, to wit:

“that paragraphs 2(1)(a) and (3) the Allocation of Revenue (Federation Account Etc.) (Modification) Order, 2002 are unconstitutional, null and void and of no effect whatsoever”

is hereby dismissed, because the President’s power to modify the existing law is Constitutional.

The Order sought by the plaintiff “…….. directing the Defendant to calculate 7.5% of the Federation Account and divide and distribute the same amongst the parties hereto and such local government councils in the States of the Federation as approved in the Allocation of Revenue (Federation Account Etc.) Act, Cap 16 Laws of the Federation, 1990” was withdrawn by the plaintiffs and it is hereby struck out. At any rate, it has all along been a futile prayer for an order that the Court may be called upon to supervise.

For the foregoing reasons, I dismiss this action in its entirety. There will be no order as to costs.

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SC.227/2002