By Muhammad Jibrin Barde

The Federal High Court (FHC) ruling, which restrains the release of Rivers State’s funds in the absence of an Appropriation Law passed by the Rivers State House of Assembly, raises significant constitutional concerns, particularly in light of the Supreme Court’s 2004 judgment (SC 70/2004).

Federal Allocation to States and Constitutional Guarantees:

The Constitution guarantees states’ entitlement to allocations from the Federation Account, and the Supreme Court in SC 70/2004 upheld that such allocations are a constitutional right that cannot be withheld arbitrarily by the federal government.

The Supreme Court’s decision in favor of Lagos State found the federal government’s attempt to withhold funds unconstitutional, establishing that allocations due to states should be disbursed as constitutionally mandated.

This precedent implies that Rivers State is constitutionally entitled to its allocations from the Federation Account, and interference with these funds may constitute a breach of that entitlement.

Requirement for an Appropriation Law:

The FHC ruling is centered around the requirement that an Appropriation Law must be in place before funds in the Consolidated Revenue Fund of Rivers State can be accessed. According to Section 120(2)-(3) of the Nigerian Constitution, funds can only be withdrawn from the Consolidated Revenue Fund based on an Appropriation Law approved by the State House of Assembly.

However, this clause does not extend to funds from the Federation Account before they reach the state treasury; rather, it governs the usage of the funds once they are within the state’s Consolidated

Revenue Fund.Conflict with Supreme Court Judgment:

The Supreme Court’s 2004 ruling indicates that federal allocations should not be impeded once they are due to a state.

The FHC’s ruling attempts to impose a condition that could delay or restrict the disbursement of funds already allocated to Rivers State.

This could be viewed as overstepping by preventing the state from receiving its constitutionally guaranteed allocations, even if these funds are held in trust until an Appropriation Law is enacted.

This interpretation aligns with SC 70/2004, suggesting that allocations should reach the state without obstruction and that any issues regarding appropriation should be resolved at the state level post-disbursement.

Legality of FHC Injunction in Absence of Appropriation Law:

While it is lawful to require an Appropriation Law for spending from the Consolidated Revenue Fund, the FHC’s decision to prevent the transfer of Federation Account allocations until the passage of an Appropriation Law may be seen as an interference in the financial autonomy of Rivers State.

Typically, withholding funds as a coercive measure to ensure compliance with budgetary laws is not within the FHC’s purview if it restricts the constitutional allocation process established by the Supreme Court.

Possible Grounds for Challenging the FHC Ruling:

Rivers State might argue that the FHC’s ruling contradicts the Supreme Court’s interpretation in SC 70/2004 and infringes upon the state’s financial rights by imposing a restriction not prescribed by the Constitution.

Additionally, the restriction on utilizing funds for election-related purposes without an Appropriation Law might exceed the court’s jurisdiction by interfering in state functions outside federal oversight.

Once funds are allocated from the Federation Account to a state, they become the state’s constitutional entitlement and are protected from external interference by the Federal Government or any federal agency.

Let me also clarify any misunderstanding that may arise regarding the core constitutional issues and the Supreme Court precedent in SC 70/2004. Distinction Between Local Government

Funding and State Allocation:

The Supreme Court case in SC 70/2004 clarified a crucial principle: the constitutional allocation due to states from the Federation Account cannot be withheld by the Federal Government.

The case involved Lagos State’s right to receive funds for its recognized Local Government Authorities.

While Lagos State created additional Local Government Development Areas (LCDAs), it did not prevail on those additional LGAs; however, the Supreme Court did affirm the illegality of the Federal Government’s attempt to withhold funds for the constitutionally recognized LGAs.

Here, the distinction lies in the broader constitutional principle: federal allocations are a constitutional right for each state, and the Federal Government does not have the discretion to withhold funds due to a state based on internal administrative issues within the state, such as the status of a state budget.Federal Government’s Authority.

Regarding State Appropriation Processes:

In the Rivers State matter, the Federal Government is not seeking to “withhold” allocations per se; however, the Federal High Court’s order to prevent the disbursement of Rivers State’s funds due to the absence of an Appropriation Law raises a similar issue of interference.Constitutionally, while an Appropriation Law is required to access funds within the Consolidated Revenue Fund of the State (under Section 120 of the Constitution), the constitutional entitlement of federal allocations to the state is distinct.

Once funds are allocated from the Federation Account to a state, they become the state’s constitutional entitlement and are protected from external interference by the Federal Government or any federal agency.

Role of the Federal Government and the Scope of Judicial Orders: The argument suggesting the President could remove a sitting Governor and replace them with an administrator is legally unsound within the current democratic framework.

The 1999 Constitution of Nigeria, as amended, does not grant the President unilateral powers to remove a governor for issues related to the passing of the state’s budget.

Removal of a Governor is explicitly governed by constitutional provisions, primarily through impeachment processes within the State House of Assembly. Any administrative intervention on the grounds of “national security” would require a formal declaration of a state of emergency and is limited to extraordinary circumstances.

Path Forward for Rivers State:

The simplest resolution would indeed be for the Rivers State Government to present the budget for approval. However, this does not grant the Federal Government or any federal court the authority to impose restrictions on funds due to Rivers State from the Federation Account.

This would represent an overreach and conflict with the constitutional precedent set in SC 70/2004.

Summary

The FHC’s ruling could be challenged on constitutional grounds, as it oversteps by potentially infringing on Rivers State’s rights to its constitutionally mandated allocations.

Any conditions placed on these allocations should respect the autonomy and financial independence of the state as provided by the Constitution.

The Rivers State Governor’s actions or inactions concerning the Appropriation Law should be addressed internally within the state’s legislative processes, without federal interference in the form of withheld allocations.

Conclusion:

The FHC ruling, though focused on enforcing fiscal discipline, potentially conflicts with the 2004 Supreme Court decision that supports the automatic and unconditional allocation of funds to states.

The FHC’s requirement for an Appropriation Law as a precondition for receiving these funds could be argued as unconstitutional interference if it restricts the initial disbursement process.

Rivers State may challenge this ruling in the appellate courts, emphasizing that federal allocations are a constitutional entitlement and should not be conditional on state-level legislative procedures.

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