A password will be e-mailed to you.

Money Miss Road? On Political Financing in Nigeria

Since the advent of democracy in 1999, Nigeria has yet to comprehensively overhaul the means through which political parties are funded. Political finance laws and regulations, which govern how political parties and candidates for elective offices declare their funding sources, have always been flouted and abused. Political parties require funding to campaign and carry out routine operations. While any definition of democracy will require political parties and coalitions to be able to freely fund themselves, the situation in Nigeria has given room for undemocratic practices that are neither transparent nor accountable. The result is that constraints on political party funding exist only on paper.

The link between party financing and corruption in Nigeria is so clear that to overlook the former means tacit acceptance of the latter. Nonetheless, the various Electoral Acts of 2002, 2006, 2010, and even that of 2018 (amended) have all been short on implementation in the area of party financing. Since the Fourth Republic (1999 – present), Nigeria’s political parties have been characterized by undemocratic practices, coupled with gross misconducts against transparency and accountability.

FUNDING POLITICAL PARTIES

In many democracies of the world, political parties are funded through subsidies or public funding. These are sums the government pays directly to political parties to fund some or all of their political activities. In Kenya, for example, parliament recently decided that 0.3 per cent of the twenty-seven-billion-dollar 2018-19 national budget be set aside for political parties, using these parameters: 80 per cent of the reserved funds to the parties based on the total number of votes in the last election; 15 per cent based on the number of candidates in the party from special interest groups, with five per cent for the Registrar of Political Parties, as the fund administrator.

In the United States, however, political parties are funded mainly through contributions from party members and individual supporters (e.g. membership fees, dues, subscriptions and donations). Funding of political parties can come from organizations that share the parties’ political views (through, for instance, trade union affiliation fees), or business establishments that can benefit from party activities (corporate donations). The same holds for taxpayers in the form of general revenue fund. Funds for party activities can also be solicited and raised through ‘grassroots fundraising’ as party membership dues or other voluntary contributionsfrom individuals. Funds raised by individuals collectively are added to the parties’ kitty to finance their activities, such as routine operations and election campaigns.

Political funding in the United Kingdom has been a source of controversy for many years. The 2006 ‘Loans for Lordships’ affair, for instance, revealed that the Labour Party’s election campaign was funded by loans from individuals, many of who were already favoured by the party. The ‘Abrahams Affair’, years after, involved Labour Party politician, David Abrahams, being identified as donor of £650 to the Labour Party not properly declared. Other controversies include Peter Hein’s resignation from the Cabinet due to non-disclosure of donation to his Labour party deputy leadership campaign; the withdrawal of Conservative whip from Derek Conway as a result of payments he made to his children from parliamentary allowance (contained in a report of abuses compiled by members of Parliament that was conveyed in a secret dossier of a Liberal Democrats Party member).

Political parties in the UK may be funded through membership fees, party donations or through state funding, the latter of which is reserved for administrative costs. Such funding is mainly applied to support parties in offsetting administrative costs, while in the US it is generally used for financing election campaigns—to promote candidates, political parties, party policy initiatives and referenda.

In South Africa, a Political Party Funding Act exists to regulate public, private funding of political parties, and provides for the enhancement of multi-party democracy. It determines that parties must report sources and amounts of funding to the Independent Electoral Commission (IEC), which will subsequently publish this information every quarter. The act stipulates that parties must not accept donations from known proceeds of crime. Such knowledge or suspicion must be reported to IEC. To offset the complication of private and legitimate donors that prefer to remain anonymous being dissuaded, a Multiparty Democracy Fund has been created. This fund makes for receipt of anonymous donations, and monies from those who prefer not donating to any particular political party. Funds from this body will be shared among parties in the parliament based on proportion of seats they hold in the respective legislatures. It will also be administered by the IEC.

Punishment for contraventions of the act will be a fine of up to fourteen million dollars or 30 per cent of the party’s income, whichever is higher. It provides for a number of matters in relation to political parties’ funding, including the regulation of public and private funding of political parties and the establishment and management of a Multi-Party Democracy Fund, to fund represented political parties sufficiently.

In 1998, a subsidy was introduced in Nigeria to encourage the formation of political parties ahead of the transition to democracy. Over the years, this subsidy was thoroughly abused by parties, as many parties got registered and merely awaited election periods for government’s subvention. Most of these funds ended up in the pockets of a handful of party leaders. The last instance of such largesse was in 2009, before the subsidy was removed in a 2010 constitutional amendment. Between 2003 and 2009, the Independent National Electoral Commission (INEC) provided funds to political parties as subventions. This made setting up political parties quite attractive in Nigeria, as a group of persons could obviously come together to form political parties just for INEC’s ‘free money’. Arguably, the last time political parties received such from the Federal Government was in 2009, during the dispensation of late President Umaru Yar’Adua. That year, each registered party received N6 million.

Presently, Nigerian political parties have a wide range of avenues for raising funds. Parties can levy dues from their membership, either regularly or upon registration. They can solicit donations from supportive interest groups such as labour unions and private business. Parties also finance themselves by charging would-be candidates for nomination and expression of interest forms before elections. Finally, some parties include in their internal constitutions the right to levy a percentage of salary—usually about five per cent—from their elected and appointed public officers.

CHALLENGES TO PARTY FINANCING IN NIGERIA

Despite these sources of financing political parties, Nigerian parties are largely dominated by ‘moneybags’, individual donors whose donations make up almost all the party’s funds. These wealthy affiliates are so vital to the party survival that they ultimately dictate party actions and can install candidates at will. Apart from controlling the political party, a typical donor views such huge contributions to the party as a form of investment, which must yield returns subsequently. These ‘political entrepreneurs’ who invest so much money expect concomitant rewards on their investment in the form of government contracts, appointments of cronies to public offices and much more.

In a situation where the fortune of a political party rests in the hands of an individual or a tight circle of very rich persons, certain ills are bound to occur, one of which is ‘godfatherism’. The significance of these godfathers to party financing puts the larger political system in their pockets, and creates a substantial platform for corruption to thrive. Such a system would spur corruption in any democracy, and indeed it has done so in Nigeria.

Many political godfathers are sitting governors who, well known for having very deep pockets from unhindered assess to state government funds, finance most of the operations of the political parties they belong to within their domain. As a result, each of the 36 state governors is given the title ‘State Party Leader’ of their respective parties. At the federal level, the tag ‘National Party Leader’ is given to the president for the same purpose—to assist in funding the political party he belongs to, even if subtly. One wonders what becomes of the party’s national chairman when such appellation goes to the president.

Despite the changes to the 2010 Electoral Act that made government sponsorship of political parties illegal, presidents and governors continue to support their parties financially. This support is mostly carried out clandestinely but is often glaringly obvious. The federal government under President Goodluck Jonathan massively sponsored the ruling People’s Democratic Party (PDP) during the 2015 Elections. The succeeding administration under the All Progressives Congress (APC) claimed that the Jonathan Administration had spent almost N2 trillion on that election. Sambo Dasuki, the national security adviser at the time, was alleged to have misapplied two billion dollars’ worth of state security funds to organize political campaigns. The present APC government of President Muhammadu Buhari accused Sambo Dasuki, who is still in detention, of being the fulcrum around which funding for PDP’s presidential elections campaigns revolved.

Furthermore, one must not overlook the place of government contracts in political financing within democratic system as being practised in Nigeria. It is well known that when government contracts are awarded to those who are either members or affiliates of a party, especially from governments at either state or federal level, those who won such projects are often approached to make donations to the party. This is so well-defined in Nigeria that all government sponsored contracts have links to donations to the party in government.

Various electoral reforms have been introduced in Nigeria since the dawn of democracy in 1999. Yet it is one thing to have these laws and another to make them work. Sadly, Nigeria seems to be a country that lacks the political will to see important legislation through. It is clear, for example, that the Independent National Electoral Commission (INEC) lacks the capacity to check the excess spending of political parties. The forward of its operational handbook clearly conveys this, which is as follows:

‘Existing Nigerian Laws do not regulate the campaign expenditures of the individual candidates who are contesting elections. However, the laws require the Commission to exercise control over political campaign expenditures. The Constitutional and other legal provisions envisage every political party to maintain proper accounts of its funds. Section 225 (2) of the Constitution specifically requires the political parties to disclose their sources of funds and their manner of expenditures. The political parties and their candidates draw campaign funds from diverse sources which may be beyond the capacity of the Commission to fully monitor. Also the Commission lacks any enabling authority to enforce strict obedience to the laws. As a first step, it therefore becomes imperative for the Commission to devise ways and means of implementing the reporting, disclosure of all monies and assets received by the political parties in aid of their campaign effort.’

Efforts of the National Assembly to amend the Electoral Act shortly before the just-concluded 2019 elections failed as President Muhammadu Buhari withheld his assent to the amended 2018 Electoral Act. This amendment would have restricted election spending to N5 billion in presidential elections and N70 million for elections to the National Assembly. Yet even if it had passed, strict adherence to these limits would have been difficult, as typical Nigerian politicians would have viewed such figures as unrealistic—reflective of the general inability to stick to the rules on issues related to political financing.

Nigeria is one of the most expensive political systems in the world. According to Kingsley Moghalu, a former deputy governor of Nigerian central bank and a presidential aspirant in the 2019 elections, ‘Nigeria’s 2019 elections would cost six hundred and twenty-five million dollars, more than six hundred million dollars spent in India’s 2014 elections. Nigeria’s budget for 2019 poll is six hundred and eighteen million dollars. India spent six hundred and forty-five million dollars on its 2014 poll. Nigeria’s voting population is about ten times smaller than India’s.’

Moreover, human rights lawyer, Femi Falana, recently called for a review in the cost of governance under the present democratic dispensation. He charged the administration to see to it that no political officer should be paid salaries and allowances that is not approved by the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC). He also charged the Federal Government to stop payment of double salary allowances to some legislators and ministers.

In 2018, a senator from Kaduna State, Shehu Sani, disclosed that the running cost of each senator was thirteen million, one hundred thousand naira monthly, in addition to a monthly consolidated salary of N750,000. It is quite clear that such humungous amount paid to members of the legislature is not approved by the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), an organ of the government that approves the salaries and allowances of the legislators. Indeed, this body has washed off its hands on this matter, while Budget Office has never questioned the payment of unauthorized salaries and allowances to federal legislators.

Shehu Sani’s disclosure validated chairman, Presidential Advisory Committee Against Corruption (PACAC), Professor Itse Sagay, on an earlier claim that that Nigerian legislators were the highest paid in the world.

One reason for Nigeria’s expensive political system is the country’s inability to curb excess spending by political parties. Unless Nigeria is able to pass and enforce laws that clearly regulate how to truly finance a political party, how much to spend on an election, and where the money is coming from; the problem of fairness in political financing will continue and the existence of democracy in this country will be questioned.

However, recent history suggests that governments in Nigeria only play lip service to the issue of electoral reform. In 2007, the late President Umaru Yar’adua set up an electoral reform panel led by Justice Mohammed Lawal Uwais. The panel recommended that the judiciary, rather than the President, select the head of INEC to ensure its independence from the executive. It also suggested some public financing of political parties based on the number of votes received and for an Election Offences Tribunal to try those accused of violating election laws. The present administration of President Muhamadu Buhari also set up a Constitution and Electoral Reform Committee led by Ken Nnamani in 2016. The results of this Committee have not been made public, and have spurred no changes in party financing since then. In both cases, the reports from these commissions were ignored by the government of the day. For its part, the National Assembly, due to presidential veto and competing interests, has not concluded any move at amending the Electoral Act over the years.

ADDRESSING THE PROBLEMS OF PARTY FINANCING

To address the problems of party financing, Nigeria needs strong institutions capable of enforcing compliance. Parties need their funding methods reviewed periodically by INEC and by relevant anti-corruption agencies. There also needs to be an institution with the authority to go after those who violate election rules, whether this is done through the Election Offences Tribunal as recommended by the Uwais Committee or the Nigeria Electoral Offences Commission attempted by the House of Representatives. The law needs to explicitly ban the opaque process through which sitting politicians funnel state funds to their respective parties, and replace these processes with a transparent, official means of funding parties based on rules set out in law. Finally, the power of the executive over INEC should be weakened. The judiciary, civil society and political parties should have some say in the selection process for INEC’s chairman, commissioners and other members.

The Federal Government has not produced an electoral law that curbs the ‘anything goes’ approach that is currently prevalent and yields a properly streamlined political finance administration. Until these changes occur, any expectation of Nigeria’s political parties behaving differently is likely going to remain unmet