The House of Representatives and the Nigeria Sovereign Investment Authority (NSIA) are raising issues relating to the budget of the investment agency. This is even as the legal instrument from which the Authority draws its powers is clear on the matter in question, that is to say, who should approve its budget.
Already, the lawmakers have made it known that they will not allocate any funds for the NSIA in 2022 budget because of the reluctance of the management of the Authority to present its budget to them for approval. But the NSIA, on its part, is arguing that, from inception, it has not been part of National Assembly (NASS) budgetary procedure. The Authority further said that though this threat by the law-making body regarding its budget may not, in practical terms, have any effect on the operations of NSIA, there is the apprehension that it may have serious public relationship implication for the investment agency locally and internationally.
From available records, this newspaper can deduce that NSIA do not present its budget to the NASS. According the Authority, it is not a mark of antagonism with the law-making body. Rather, it is, in its thinking, a deference to the statutes from which it draws its powers.
For purposes of clarification, the NSIA is owned by 812 shareholders of which the federal government is one. Other shareholders are the 36 states, the Federal Capital Territory (FCT) and the nation’s 774 local governments. What this means is that the states, FCT and also the LGAs can lay claims to the right to oversee the budget of the agency by virtue of their shareholding. It is to avoid this confusion that the Act establishing the Authority put the responsibilities of budget and Investment approvals on the board of the NSIA. The board is made up of a member representing each geo-political zone in addition to other stated interests.
It is pertinent to refer to Section 5—1g of the Act of the NSIA which empowers it to “undertake, do or agree to do any activity or incur such expenditure and carryout such ventures which in the opinion of the board are necessary, incidental or conducive for the attainment for the objects and functions of the Authority.”
It is also relevant to point out that the federal government has a 48 per cent shareholding in the Authority. Therefore, the National Assembly represents one of the shareholder groups – the Federal Government. In vesting the power to budget for the Authority on the board, the Act takes into cognizance the fact that NSIA is a market participating institution which means that it deals in somewhat volatile market environment which can cause it to change strategy from time to time, with the implication that it may have to vary or engage in the process of virement of its budget and plans.
In our opinion, if these business decisions that may require spontaneous response are subjected to the approval process of the law-making body, where virement is illegal, it will hamper the operations of the NSIA.
Even beyond that, it is necessary to stress, in our view, that NSIA was set up to manage excess oil revenues which implicitly puts it outside the budget process of the NASS. The argument of some lawmakers that the NSIA Act is not superior to the constitution is decidedly emotive, if not tendentious. Curiously, it is the same NASS, in making the Act, that took all these into consideration and decided to vest the powers of budget on the board of the NSIA.
However, it must be noted that the issue of budget and procurement had arisen in past sessions of the National Assembly. In particular, at the immediate past session of the Assembly during a similar discussion on procurement, the NASS wanted to have oversight functions on the Authority. That move was stymied by the provisions of the Act which vests the roles of budgeting, procurement and so on the board of the NSIA. It was then decided that, for the NASS to oversight the NSIA, the Act itself will have to be amended. The amendment of the Act and the imposition of the Fiscal responsibility Act are ongoing.
In the interim and while the nation awaits the conclusion of the legislative process, we are compelled to argue that the only probable step to take by the National Assembly is to hasten the process of amending the NSIA Act so as to enable it carry out any functions it may deem appropriate. The law-making body has a point in insisting that it should have an oversight function on the management of the excess oil revenues. Still, we posit that it must do that within the ambit of the law, in this case, the Act of Parliament that set up the Authority. Until that is done, it is only fair, in our considered opinion, that the NSIA should remain accountable to the shareholders, to wit, the federal, state and local governments.