Companies operating in Nigeria will henceforth contribute a portion of their after-tax profits to the newly formed Nigeria Police Trust Fund aimed at improving funding and training of personnel of the force.
This follows the signing of the Nigeria Police Force Trust Fund Act 2019 by President Muhammadu Buhari.
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While the companies are expected to contribute 0.005 percent of their net profits for a special intervention fund established under the Act, the trust fund would also consist of an amount constituting 0.5 percent of the total revenue accruing to the Federal Account.
In addition to that, the fund would consist any take-off grant and special intervention fund as may be provided by the three tiers of government; money as may be appropriated to meet the objective of the Act by the National Assembly in the budget; as well as aids, grants and assistance from international bilateral and multilateral agencies, non-governmental organisations and the private sector.
The funds are expected “to among other things, provide funds for the training and retraining of the personnel of the Nigeria Police Force (NPF), provide state-of-the-art security equipment and machineries to improve the general welfare of the personnel of the force”, according to an explanatory memorandum of the Act seen by BusinessDay.
But analysts think the move will further stifle companies who are already reeling from harsh operating environment.
“Are they going to kill the companies?” Igbuan Okaisabor, vice chairman and CEO, Construction Kaiser Group, queried. “The Tertiary Education Trust Fund established some years ago has not improved Nigeria’s education sector, rather it has been going worse. What is the guarantee that Nigeria Police will improve?”
According to the Act, the fund would cover all personnel of the NPF, including its auxiliary staff in Nigeria and abroad. However, it would only operate for six years from the commencement of the Act and shall, at the expiration of that period, cease to exist unless it is extended for any further period by an Act of the National Assembly.
Also, the Nigeria Police Trust Fund would consist of grants, donations, endowments, bequests and gifts, whether of money, land or any other property from any source as well as money derived from investments made by the Trust Fund.
“The Trust Fund shall be utilised for the construction of police stations of living facilities, such as quarters or barracks for the NPF; to finance the procurement of books, instructional materials, training equipment for use at Police Colleges and such other similar training institutions; to meet the cost of participation by the personnel of the NPF at seminars and conference relevant to, or connected with, policing or intelligence gathering,” the Act reads in part. The upper chamber of the National Assembly had passed the Nigeria Police Trust Fund Bill on April 9, 2019, and it was signed into law by President Buhari on July 2, 2019.
While Okaisabor agreed the NPF need to be properly funded, he pointed out that the approach adopted was not right and could make the objectives of the fund suffer setbacks.
“Since Nigeria emerged from recession, companies have been struggling and people are losing their jobs,” Okaisabor said. “It is just going to add more burdens on the business and further worsen the nation’s unemployment rate.”
A similar Act called “The Lagos State Security Trust Fund (LSSTF)” Act was passed by the Lagos State House of Assembly in September 2007 as a direct response to the security challenges in the state.
The trustees of the fund were appointed by the governor, mainly from the private sector and operated independently of government. However, the fund did not receive any subvention from the government; rather the government made donations in kind to the fund.
In addition, the account of the Trust Fund was audited by international auditing firms currently Ernst & Young and published annually for public information at the yearly town hall meetings on security with the governor where the LSSTF renders its account of stewardship.
But whereas the LSSTF gets its funding mainly from voluntary donations from individuals and private companies, the Nigeria Police Trust Fund proposes to compel firms to part with a chunk of their profits.
Dapo Abiodun, Ogun State governor, also announced plans to re-launch the state’s security trust fund.
“The new security trust fund will have all the governance that it requires. It will have a chairman, executive secretary, board. It will have a commitment from a few financial institutions of note and a few people from the private sector that are committed to serving on the board. We are also committed to funding this fund. We on the part of the state will also commit to our funding as well,” Abiodun said.
Godwin Obaseki, governor of Edo State, recently unveiled the Edo State Security Architecture, a new framework to boost security in the state. The governor launched the Edo State Security Trust Fund, with the state government committing N2 billion as seed fund.
Femi Onashile, a Lagos-based manufacturer, said the new Nigeria Police Trust Fund Act is not the first time the government is coming up with an intervention programme for the personnel of the Nigeria Police Force. According to him, most of the funds from the trust fund have always ended in private pockets with funds diverted for other personal use.
“If you remember the Police Equipment Foundation (PEF) headed by Kenny Martins, the funds realised were eventually mismanaged and culprits are still walking free on the street,” he said.
OLUWASEGUN OLAKOYENIKAN & FIKAYO OWOEYE
