House Rejects Bill to Repeal Sovereign Wealth Fund, Transfer Funds to Finance Ministry

The Nigeria Sovereign Investment Authority (NSIA) Act, 2011, was repealed by the House of Representatives on Thursday, and its assets and liabilities were transferred to the Ministry of Finance Incorporated.

Chairman of the Public Accounts Committee, Hon. Wole Oke, is sponsoring a bill 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.”

All funds currently in the custody of the Nigeria Sovereign Investment Authority (hereinafter referred to as the Authority) shall be transferred to the Federation Account, and all investments made by the Authority shall be managed by the Ministry of Finance Incorporated established pursuant to the Ministry of Finance Incorporated Act, according to Oke, who led the debate on the general principles.

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The lawmaker, citing Section 162(1) of the Constitution, which states that all federation revenues should be paid into the Federation Account, said the passage of the NSIA Act was the first breach of this provision of the constitution, and that this contention had been open for a long time.

He also claimed that the NSIA has a history of failing to submit its spending to the National Assembly’s appropriation powers.

The various House Committees on Finance, he claims, have engaged with NSIA management on the need to follow this constitutional procedure a number of times, but they have arrogantly and flagrantly declined.

According to him, this means that the NSIA has gone ahead and spent the nation’s commonwealth without the consent of the Nigerian people, necessitating the need to put a stop to the waste and destruction of Nigerians’ futures.

He urged his colleagues to support the Bill on its second reading so that they can conduct a thorough investigation and invite members of the public to testify on whether NSIA violates section 162 of the 1999 Constitution.

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

“Despite 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 the distribution of proceeds from the Fund, the NSIA’s management has been arbitrary in their disbursement and distribution of funds, and frequently does not even allocate and disburse funds to the state, local governments, and the area council.”

“In 2011, one of our decisions was to establish the Nigerian Sovereign Investment Authority, which will manage and save resources for Nigerians, among other things.” The Central Bank of Nigeria already performs some of these functions. Apart from that, the point I’m making today, which I’d like the parliament to consider, is whether our decision to establish this body is in accordance with Section 162 of the Federal Republic of Nigeria’s Constitution. Repeal or amendment of an existing Act is one of the ways the parliament can correct itself. And it’s for that reason that I’m here today. I’d like us to read section 162 of the Constitution in light of the Act that established this body.”

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While a few lawmakers supported the Bill following his debate, others opposed it, calling for sanctions and increased oversight rather than repealing the Act.

Hon. Henry Nwawuba stated in his contribution that the Sovereign Wealth Fund has advantages that should be considered before making a decision.

“I want to state for the record that having a Sovereign Wealth Fund has a benefit,” he said. Nigeria must have decided to save for a rainy day because of this. It should be taken into account as we discuss this. We should consider the benefits and drawbacks.”

In addition, Hon. Ayokunle Isiaka believes that rather than repealing or merging the Sovereign Wealth Fund, which was established by the legislature to serve some unusual purposes, lawmakers should investigate whether it is performing as expected.

Hon. Lynda Ikpeazu, for one, scoffed at the claim made by Oke’s bill that it violates section 162 of the constitution.

“The sponsor alluded to section 162 of the constitution,” she said. However, if you look at 162(3,4), you’ll notice that this fund was established by this parliament. That is not to say that we cannot repeal it; rather, it does not offend it. It’s critical that we consider the intent behind enacting that law and comprehend why it was enacted in the first place before making a decision.”

In agreement, Hon. Chris Azubogu urged the sponsor to withdraw the Bill, warning that it is in the national interest not to project and portray Nigerians in an unfavorable light internationally.

“I appeal to the sponsor, Hon. Oke, that it is in the national interest that we do not project and portray Nigerians in an unacceptably negative light,” he said. As an institution, the Sovereign Wealth Fund has been involved in sourcing funds all over the world, and many people have placed their trust in Nigeria as a result.

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“Let us take this bill down a notch, conduct more consultations, and engage.” The agency fails to submit accurate reports to the National Assembly. We will give them the opportunity to come and explain what they are doing in the future. If there are provisions in the Act that need to be amended to make them more accountable to the National Assembly, we will do so rather than repealing it.”

The majority of lawmakers voted against the Bill when it was put to a voice vote by the Deputy Speaker, Hon. Idris Wase, who presided over the session.