Response of the President of the Federal Republic of Nigeria, Chief Olusegun Obasanjo, GCFR, toAllegations made against him by the House of Representativesto the Peoples Democratic Party

INTRODUCTION

I am happy to present my explanations to you not only because it is just but also because I have absolute confidence in your integrity and objectivity.Your courage, your experience, your patience, your dedication to our Party and to our country and your understanding of our strength and weaknesses will enable you to appreciate the responses which I now make to the questions that have been raised.I assure you that I am not angry with the complainants and so I shall present my points dispassionately.From me you shall hear nothing but the truth.All that I have done I have done according to the law.All that I have done I have done in the best interest of our great country.I have not deliberately violated the law or the constitution and I have not sought personal gain.I am not accused of corruption or mis-use of my power.
 

In a country as complex and complicated as ours no single man or woman can have all the answers.It is for this reason that I have always consulted widely and been open to suggestions from all quarters.Nevertheless, the ultimate responsibility for the governance of the country is mine and it is I who must answer when questioned like now and before the bar of the public.
 

I thank the National Chairman of our Party and members of the National Working Committee for living up to their responsibilities at this time.I commend their efforts at asserting the supremacy of the Party and their insistence on order and discipline without which the Party’s effectiveness and influence will be grossly undermined.That effectiveness and influence is as essential in the Legislature as it is in the Executive.Without discipline and respect for constituted authoritythe nation would never have entrusted its affairs to us at this critical time.
 

I regard what was forwarded to the Party by the Speaker of the House on behalf of the PDP cacus of the House as a complaint to be explained rather than a querry to be answered as there is no legal basis for such.
 

Without too much preamble , let me go straight to the issues raised and let me respond to them point by point.At the end, I would like to throw more light on some aspects of executive/legislative relationships at the Federal level which will need a change of attitude and orientation for progress to be made.
 

Now I address the issues as presented.
 

First Allegation:
 

That sometime between the months of April and July, 2002, the president purportedly amended the Capital Provisions of the 2002 Appropriation Act by reducing the Capital budget to 44% without forwarding the said amendments to the National Assembly for passage in violation of Section 80(4) of the 1999, constitution which acts amounts to gross misconduct.
 

Response

Shortly after the 2002 Appropriation Act was passed, it became apparent that the revenue projections which underpinned it were unrealistic. I immediately took the initiative of inviting the leadership of the National Assembly led by the President of the Senate and the Speaker of the House of Representatives to a meeting at the Presidential Villa on 4^th June, 2002 to brief them on the implications of the revenue shortfalls as well as the judgment of the Supreme Court on the 2002 Appropriations. I also informed them of the need to prioritize the Budget in the face of the dwindling revenue.Subsequently, on 16^th June, 2002, I had a meeting with a delegation of nine Senators led by the Senate President, amongst whom were the Chairmen of Senate Committees on Appropriation and Public Accounts,during which detailed responses were given to the charges of the Senate Public Accounts Committee alleging non-implementation of Budgets since 1999. 
 

Among other things, the Senate delegation was informed that there had been a significant shortfall in the revenue profile of the Budget, notably the unrealised US$1.3 billion and US$1.2 billion as a result of the botched privatization of NITEL and non-recovery, as yet,of looted funds, respectively. At that meeting, we agreed that a Joint Executive/Legislative Committee of twelve persons, consisting ofsix persons from each arm, should be set up under the Chairmanship of the Vice President to prioritize the 2002 Appropriations in the light of the changing revenue profile. 
 

I immediately followed this up with a formal request to the leadership of each Chamber of the National Assembly to present the names of their nominees to the Joint Committee. Instead of presenting the names as previously agreed, the leadership of the National Assembly refused to do so. I had no option but to direct that the prioritization exercise should proceed as planned. The National Assembly was notified of the outcome of the exercise on 10^th August, 2002 as well as my intention to send a Supplementary Bill to the National Assembly in respect of some outstanding programmes and projects, inadvertently omitted from the 2002 Appropriations. 
 

I should stress that theexercise was limited to putting preferential order to the projects and programmes already included and approved in the 2002 Appropriation Act, within the limits of the resources available to implement the Budget. It neither involved new expenditure, nor a reduction of the appropriations in the approved Budget. The capital budget has not been reduced to 44% as a result of the prioritization exercise, as alleged. It was therefore not necessary to send a fresh Bill to the National Assembly for amendment of the 2002 Appropriation Act.
 

If during the course of the financial year the revenue profile improves, the priority will only be enhanced within the already approved budget. An Approved budget can never be regarded as sacrosanct with regard to implementation especially in the face ofdwindling revenue. The need may often arise for urgent additionalfunds that cannot be covered by the contingencyvote. An example of an institution whose needs may often be substantial and unforeseen and yet urgent and imperative is the Independent National Electoral Commission (INEC) and/or few on-going projects. It was for this reason that the National Assembly was notified of the Executive’s intention to send a Supplementary Appropriation Bill for those items inadvertently omitted from the 2002 main Appropriations or urgent new items.If anything, my action should be hailed as prudent management of the economy.
 

Section 80(4) of the 1999 Constitution provides that “No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.” By virtue of this provision I am not allowed to exceed the limit set by the National Assembly inthe Appropriation Act. However, I can, as I have done, apply limited funds to meet the needs approved in the Appropriation Act, having regard to the national interest. The implementation of the budget is the responsibility of the Executive and it need not consult the National Assembly in order to determine its priorities. I am therefore not guilty of any gross misconduct as alleged.
 

Second Allegation

Response

It became apparent from the report of the first Committee that the judgment had far reaching implications for the 2002 budget and the three tiers of government. The Supreme Court, amongst other things, declared unconstitutional, the deduction of 7.5% special funds as a first line charge on the Federation Account with the exception of 1% allocated to derivation in the existing Law i.e Cap 16, (as amended). Furthermore, the Court held that the 1% allocated to derivation was inconsistent with the Constitution which provides for payment of not less than 13% as derivation.The Court also declared that there was no legal basis for the payment of 13% derivation then being made to the oil producing states as the National Assemblyhad not enacted the relevant law giving effect to it nor the President, as the Appropriate Authority, modified the existing law in order to bring it into conformity with the Constitution pursuant to Section 315(2) of the constitution. 
 

While awaiting the Report of the Second Committee, and on the advice of the Attorney General of the Federation, I issued the order subject of this charge dated 8^th May, 2002 which, modified the existing law on revenue allocation and brought it into conformity with the Constitution. The Order also gave legal backing to the payment of 13% derivation to the oil-producing states hitherto stopped.I transferred to the Federal Government the funds and responsibility for the Federal Capital Territory (1%), Development of the Mineral Producing Areas (3%), General Ecological Problems (2%), Stabilisation Account 0.5% previously covered by the Special Funds, deduction of which, as a first line charge on the Federation Account, the Supreme Court had declared unconstitutional.It is to be stressed that the Federal Government’s share remains 48.5% asthe7.5% was applied by the Federal Government to the purposes for which the funds were orginally intended.It should be noted that even before the modification of the law these responsibilities were discharged by the Federal Government and the funds accordingly allocated to it.
 

I took that action in absolute good faith and as necessitated by the exigencies brought about by the volatile situation at hand and in accordance with the Constitution.I was guided by the Supreme Court’s judgment which stated as follows:
 

“Now, sub-Section (2) of Section 315 of the Constitution provides for modification of an existing law to bring it into conformity with the Constitution. The sub-Section reads:
 

(2)The appropriate authority may at any time by order make such modifications in the text of any existing law as the appropriate authority considers necessary or expedient to bring the law into conformity with the provisions of this Constitution.
 

The word “modification” is defined in sub-Section (4) of Section 315 as including-

See Att.-Gen Ogun State v. Att.-Gen of the Federation (1982) 1-2 SC13. And the appropriate authority in respect of Cap 16, a law of the Federation, is the President. Thus, the President has constitutional power, by order, to modify Cap 16 either by way of addition, alteration, omission or repeal, to bring it into conformity with the Constitution. This he has not done. At least, our attention has not been drawn to any order made by the President modifying Cap 16 to bring it into conformity with the 1999 Constitution.”
 

It is apparent from the above that I acted within the limits of the powers conferred upon me by the Constitution, in the best interest of the nation and as dictated by exigencies of the time.Nevertheless,I intend to table proposals before the National Assembly for a new revenue allocation formula as soon as I receive the necessary advice from the Revenue Mobilisation Allocation and Fiscal Commission.Moreover, this has become necessary since the proposal I earlier submitted on 16^th August, 2001 tothe National Assembly on the new revenue allocation formula for consideration had not been acted upon before it was withdrawn as a result of the obvious implications of the judgment of the Supreme Court on the proposal.The House of Representatives is entitled to dispute the constitutionality of my order.In such a situation, it is my humble view that judicial interpretation ought to be sought rather than raising allegation of gross misconduct.It is a matter of interpretation of Constitutional provisions, and this lies exclusively in the domain of the Judiciary.
 

Third Allegation

(b)Expenditure on the National Identity Card project.He authorized the spending of the sum of N9.5 Billion vide letter of credit as against the sum of N5.9 Billion cumulatively approved for the years 2001 and 2002 in the Appropriation Acts respectively.
 

(c)He authorized the purchase of 63 houses and their furnishing for Ministers in the years 2000 to the tune of N3,019,153,178.06 without any budgetary provisions in the 2000 Appropriations Act.
 

Response

(a)The contract for the National Stadium, Abuja was awarded on the basis that payment to contractors was to be sequenced over three years of successive budgetary appropriations. In the 2001 budget,N12.8 billion was appropriated for the National Stadium, out of which N8 billion has been paid leaving a positive balance of N4.8 billion.It is apparent, therefore, that no expenditure was incurred on the National Stadium contract in excess of appropriated sums.On the contrary, the expenditure so far incurred is below the amount appropriated. 
 

National ID Card Project
 

(b)The chequered history of the National ID Card project is well known.It suffices to add that, in the past, a great amount of time and resources was spent on the project with very little to show for it. In fact, the National Assembly had itself inquired into this project. I believe that its findings must be quite revealing.
 

The following appropriations have, so far, been made for the project:
 

NBillion
 

FY 20006.00
 

FY 20014.431
 

FY 2002.5 
 

 TOTAL 11.931

The Federal Executive Council decided to complete the National ID card project given its enormous potential for enhancing national security amongst other benefits. Pursuant to that decision, the Council awarded contract for the project to SAGEM AG of France after a transparent process involving competitive international bidding. SAGEM demanded mobilization fee in order to execute the contract expeditiously. This was paid from the appropriated sums.I should add that so far the sum of N9.5 billion spent on the National ID Card project as stated by the House is less than the appropriated sum of N11.931 billion thereby leaving a credit balance of N2.431 billion.It is apparent, therefore, that no excess expenditure was incurred in respect of the National ID project as alleged. 
 

Purchase of Houses
 

(c)On assumption of office in May, 1999, the present Administration was faced with acute shortage of both office and residential accommodation, but especially the latter. Members of the National Assembly were themselves victims of this harrowing experience. Huge sums of money, by way of allowances, were initially paid out to distinguished Senators and Honourable members of the House in lieu of accommodation. 
 

Similarly, a number of Ministers, Advisers, Special Assistants and other political office holders were initially not accommodated due to the shortage of government owned houses. It was in the face of this situation that the Federal Executive Council decided to provide official accommodation to several public office holders who would otherwise have had to be paid huge allowances in lieu of official accommodation. Consequently in 1999, the Federal Government sought from the National Assembly an additional capital allocation for the Ministry of Federal Capital Territory (MFCT). In response to this request, the National Assembly approved the sum of N5.2 billion as supplementary capital budget for the MFCT.
 

Of this amount, approximately N2.8 billion was spent for the procurement of houses and furniture for Federal public office holders. This was well within the appropriated sum.Moreover, it is worthy of note that the 1999 Supplementary Appropriation Act did not specify the matters for which the appropriated funds were to be applied. 
 

It is not true that N3.019 Billion was expended exclusively on the houses and furniture of ministers.The houses were purchased for many public office-holders that require official accommodation.
 

Fourth Allegation

Fifth Allegation

Response

Section 218(1) of the Constitution provides that “the powers of the President as the Commander-in-Chief of the Armed Forces include power to determine the operational use of the Armed Forces”.Likewise, Section 8(1) of the Armed Forces Act No. 105 of 1993 vests power in me “to determine the operational use of the Armed Forces. .” Subsection (3) of this Section defines “operational use of the Armed Forces” to include the operational use of the Armed Forces in Nigeria for the purpose of maintaining and securing public safety and public order.I am also empowered by Subsection (2) to issue general or special directives to delegate responsibility for the day to day operational use of the Armed Forces to the Chief of Defence Staff and the respective Service Chiefs.In the exercise of these powers,I am not required either by the Constitution orthe Armed Forces Act No. 105 of 1993 to have recourse to the National Assembly. This allegation is, with due respect, totally misconceived and the use of the term “massacre” is particularly offensive and inciting.
 

In addition, I have power under Section 217(2)(c) of the Constitution to deploy troops in aid of civil authorities. In deciding whether or not to do so I need not consult the National Assembly. The National Assembly is not required to prescribe conditions for the operational use of the Armed Forces under Section 8(1,2&3) of the Armed Forces Act No. 105 of 1993 (now deemed to be an Act of the National Assembly).Once I have exercised any power to deploy troops those troops are to be governed in their conduct by conditions laid down by the National Assembly. In my judgment I have ample powers under the existing law to act as I did.In any event, under our Constitution both the Executive and the National Assembly can initiate necessary bills. The necessity for troops in aid of civil authority arises only after the Police have failed. Such situations demand urgent and decisiveaction to maintain law and order and save lives and property.
 

The National Assembly, has neither enacted a new law nor amended the existing law prescribing any such conditions.Similarly, the Armed Forces Act No. 105 of 1993, which is an existing Law and deemed to be an Act of the National Assembly within the contemplation of Section 315 of the Constitution, is what we have as guide on these conditions. And, as the President of the nation, I am under obligation to ensure the security and safety of lives and property of the citizenry in any part of the nation.Undoubtedly, it was not the intention of the framers of the Constitution that aSection of the country that is engulfed in crisis be allowed to degenerate and be destroyed only because the National Assembly is yet to enact an Act prescribing conditions under which the Armed Forces would operate when called upon to act in aid of civil authorities.And if the National Assembly has to enact laws for each situation the affected areas would have been completely destroyed before the Law is enacted. The deployment of soldiers to Odi and Zaki-Biam where nineteen soldiers were decapitated with the loss of many civilian lives was for the purpose of assisting the Police to restore order. This was done within my constitutional powers and in absolute good faith with the aim of containing the worsening situation in the areas in the interest of security and to maintainlaw and order and save lives and property.
 

Sixth Allegation

Response

Based on available revenue, the budgets for 1999, 2000 and 2001 were correspondingly implemented. In fact, in the years 1999, 2000 and 2001 there were in-built deficit items which were not realized even though the core revenue, ie, revenue from oil and non-oil sources, was surpassed. Total revenue fell short of expectations as indicated in the table below:
 

	1999 N’b	2000 N’b	2001 N’b	Prorated Jan – July, 2002 N’b
Total Expenditure(budgeted)	344.32	657.10	919.78	628.51
Total Revenue (Actual)	260.00	597.98	743.24	387.88
Implicit Deficit	(84.32)	(59.12)	(176.54)	(240.63)

The level of implementation of the budget is shown below through detailed analysis of the components of the budget from 1999 – July, 2002.
 

DETAILED ANALYSIS OF BUDGET PERFORMANCE FROM 1999 - JULY 2002

 

Particulars	1999			2000			2001			2002 (Jan - July)
	Budget  (b)	Actual (b)	%	Budget  (b)	Actual (b)	%	Budget  (b)	Actual (b)	%	Total Budget (b)	Actual (7 Months) (b)	%
Personnel Cost	179.50	174.28	97.09	170.20	218.47	171.95	251.70	294.94	144.84	352.31	209.50	59.46
Overhead Cost	84.80	57.70	68.04	71.30	53.11	84.81	120.20	107.51	97.31	91.78	49.06	53.45
Domestic Debt Servicing	80.00	90.20	112.75	100.00	104.16	104.16	100.00	132.60	132.60	134.00	113.69	84.84
Total Recurrent	344.3	322.18	93.57	341.5	375.74	110.03	471.9	535.05	113.38	578.09	372.25	64.39
Total Capital	205.29	109.69	52.40	355.50	249.05	70.06	624.01	413.35	66.24	499.35	92.45	18.51
Grand Total	549.59	431.87	78.58	696.41	624.79	89.72	1095.9	948.4	91.37	1077.4	464.7	43.13

The above table shows, that during the period January 1999 - July 2002, while recurrent expenditure was fully implemented, except for overhead in 2002, the capital expenditure could not be fully implemented. In 1999, the capital budget was 52.40% implemented, while in 2000, it was 70.06% implemented.However, in 2001, it was 66.24% implemented while in year 2002, capital budget implementation was only 18.51% of total budget as at 31^st July, 2002.This low performance is due to the low revenue realised during the first seven months of the year.Revenue shortfall in the first seven months of the year 2002 occurred in both oil and non-oil revenue.In the case of oil revenue, it was due to the cut in our OPEC quota while in the case of non-oil revenue, it was due to theyet unrealised revenue and unrealistic revenuecontained in the Appropriation Act. The full details of revenue shortfall, as it affects the 2002 budget, is as shown below.
 

Revenue Performance for Budget 2002 as at 16^th August, 2002