How Nwoko’s Activism Stopped Unathorised Deductions from State’s Revenue

beginning from 2005 has been the final arbiter on how such funds are to be shared. During Obasanjo’s administration, many states and their governors did not have the courage to challenge the anomaly. The practice of unauthorised deductions by the federal government from states and local governments, as well as by states from local governments continued unchallenged.

First to notify the states and LGAs about these deductions and the implications was Hon. Ned Nwoko, who represented Aniocha/Oshimili Federal Constituency in the House of Representatives between 1999 and 2003.

Nwoko, having practiced as a Solicitor in England and Wales, and represented developing countries in debts negotiations in the UK, understood the gimmicks on the part of the federal government.

Undeniably, he saw the loophole and reached out to some of the governors, and decided to pick up the case against the federal government to the consternation of many. According to Nwoko, he had to go into contingency work plan with the Nigerian Governors Forum (NGF) to pursue the case at his own cost. The plan had a caveat that should he emerge victorious in court against the federal government, the states were liable to pay him a certain percentage. Former governors who gave their nods to the plan included Jolly Nyame of Taraba State, Boni Haruna of Adamawa State and the late Abdulkadir Kure of Niger State. He observed that during the period under review, “there were deductions of funds every month; huge sums of money, almost equivalent of 10 per cent from allocations to the 36 states in the name of servicing foreign loans.”

Given the enormity of the funds involved and the role of the federal government in the illicit deductions, there was actually no leeway to stop the illegality. It was Nwoko’s intervention that prompted the Obasanjo’s government to constitute a committee made up of the Debt Management Office (DMO), Federal Ministry of Finance, the Accountant General of the Federation, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to look into the matter.

After three months, the federal government admitted that there were overdeductions from the state’s allocations, but came short of providing a definite solution.

With this approach, Nwoko’s team had no other option than to seek legal redress. “At the time, I undertook this work; nobody knew it was going to work. How could one man challenge the federal government on behalf of states? They asked. I had to pay my accountants, lawyers and staff; it took so many years. Then, Obasanjo did what was remarkable, he asked the Ministry of Finance to stop further deductions. The case continued, but we succeeded in 2013 with a court judgement,” Nwoko told THISDAY.

Instructively, Nwoko’s constitutional fiscal activism had, to a large extent, contributed to improving the economies and revenue base of states and local governments in many respects. The intervention, the stoppage of deductions of allocations by the federal government and the court cases have today combined to bolster revenue allocation to states and local governments, thereby, adhering to fiscal autonomy as required by the 1999 Constitution.

Beyond the court victory and the settlement clause between Nwoko and the NGF, his contribution to ensuring equitable distribution of funds and that no tier of government is short-changed is a proof of his belief in the system. His resolve to legally challenge the abuse of laws of the land by the federal government and the manipulation of states and local government’s funds has enthroned a new order in the nation’s fiscal policy architecture. Be that as it may, much still lies ahead for the Idumuje-Ugboko high prince to plough and conquer.