Many Nigerians may just be coming to the realisation that political parties are vehicles in the hands of few ‘political entrepreneurs’ who invest huge sums and expect concurrent rewards on such investment in the form of public works and procurement contracts. To addictive watchers of Nigeria’s political drama, however, the issue of party funding has for long posed a serious concern. These political watchers have always questioned the sources of the huge funds that political parties throw about during electioneering, as well as why the Independent National Electoral Commission (INEC) has failed to act despite existing laws regulating election spending.
The 2006 Electoral Act, for instance, places a ceiling on the amount that could be spent by those seeking election into the various political offices. According to the Act, a person running for the presidency can spend up to N1 billion; governor up to N200 million; N40 million for senate; N20 million for House of Representatives; N10 million for State House of Assembly and local government chairman, and N1 million for ward councillor. Curiously, the 2010 Electoral Act doubled these campaign spending limits.
But even with these limits, BDSUNDAY investigations reveal that there has not been any form of enforcement of the law by INEC, which is empowered by section 153 of the 1999 Constitution to monitor campaign finance, audit the accounts of political parties, and make that information available to the public.
Section 225 (2) of the constitution specifically requires that political parties disclose their sources of funds and their manner of expenditures to the electoral umpire, while section 226 (3) provides every member of the commission or its duly authorized agent with unfettered right to access at all times the books and accounts and vouchers of all political parties and to request from the officers of the political party such information and explanation as they deem necessary for the performance of their duties under the constitution.
Furthermore, section 84 (7) of the Electoral Act 2002 also mandates INEC to make available for public inspection during regular business hours at the national and state offices the audited returns of political parties, stating that the publication shall include name, address, occupation and amount contributed by each contributor to political parties.
Consequently, the external auditor, who is nominated and paid by INEC, should have access, at all reasonable times, to all records, documents, books, accounts and vouchers held by the political party and to such information and explanation that in the auditor’s opinion is necessary to conduct the audit. These include copies of official receipts issued, bank statements and cancelled cheques, lists of outstanding cheques, copies of all bills, vouchers and pro-forma invoices, details of any loans, details of fund-raising functions, details of miscellaneous revenue, and details of inventory remaining on hand. The law requires that the auditor’s report should be submitted directly to INEC.
According to Nigeria’s electoral law, all amounts paid by members of a political party exceeding the amount of membership fee allowed by law shall be considered as contributions and be reported.
Similarly, identity of a person who provides donation to a political party shall be stated as required by law. Even if the donor has requested that his/her identity be not disclosed to the public, the political party is obliged to inform INEC about such request. In that case, the donation and value shall be presented as an “anonymous” donation. There shall be an express indication that information about the donor would be disclosed to INEC.
Furthermore, all gifts and services provided to a political party for which the party is not obliged to pay shall be recorded, and a provider of free service or gift is obliged to issue a receipt to the party stating the value of the service or gift provided and indicating that the political party is not obliged to pay for the bill or part thereof.
These declarations are then offered for public scrutiny by publishing them in official media or making them available to commercial media. However, financial information about political parties or candidates can also be disclosed indirectly – as a consequence of political competition.
But the lack of attention to this crucial area is of grave concern because the unchecked influx of money into politics produces governance that has been captured by a tiny minority to the detriment of a majority, says Tene John, head, Department of Political Science, Nigerian Institute of Journalism (NIJ), Lagos.
“The result is a political process captured by special interests, resulting in an undue influence on government policy, distortion of political discourse, and a reduction in political participation,” John tells BDSUNDAY.
He explains that most typical mechanisms of disclosure are employed inter alia in many democratic countries – political parties or candidates are required to submit declarations containing their income, spending or both.
“The opposite is the case in Nigeria where parties are seen as investments bereft of any ideological foundation. As such, there must be returns if they are to stay in business. This profit motive has consistently given rise to the godfather syndrome where an individual or group bankrolls the party and claims ownership,” he says.
“Democracy costs money. Campaigns cost money. Anyone who knows anything about the way politics is done in Nigeria knows the huge cost of a campaign for public office. This cost is so high as to be prohibitive to all but the richest men, or those who have rich benefactors, or those who have their hands in public funds,” he adds.
As at 2014, it cost the sum of N1 million to pick the People’s Democratic Party (PDP) nomination form for the State House of Assembly, N2.5 million for House of Representatives candidate, N3 million for Senate, N5 million for governorship, and N10 million for the presidency. On the other hand, the ruling All Progressives Congress (APC) ‘sold’ its nomination form for the 2015 presidential primary at a whopping N25 million.
That virtually all political parties in the country do not adhere to electoral law is a moot point. Although there are no recent published audit reports of financial activities of political parties in the country, the 2011 edition published by INEC revealed utter disdain for the law by parties. According to the audit report, none of the parties stated sources of funds as required by law.
Violation without punishment
Apart from the lack of managerial structure within Nigerian political parties as revealed by the 2011 financial audit report, none of the parties disclosed sources of funding, contrary to the law, even though they spent funds far more than income declared.
BDSUNDAY checks show that the parties were not punished by either INEC or the National Assembly, to which the reports are meant to be sent and who have the mandate to apply sanction to erring parties.
Section 228(c) of the 1999 Constitution gives powers to the NASS to provide for an annual grant to INEC for disbursement to political parties on a fair and equitable basis to assist them with their functions. But observers have argued that the Senate ought to take part of the blame if the audit reports have not been acted upon and if the erring parties have not been sanctioned.
Okechukwu Innocent Eme of the Department of Public Administration and Local Government Studies, University of Nigeria, Nsukka, in a recent article writes that there are growing concerns about high costs of election campaigns and other related activities and their implications for political corruption in the country.
He notes that during electioneering campaign in 2003, a group of business people under the aegis of Corporate Nigeria contributed over N2 billion to the campaign funds of former President Olusegun Obasanjo in contravention of Section 38 (2) of the Companies and Allied Matters Act which prohibits corporate bodies from making contributions to political parties.
A party insider told BDSUNDAY that Nigerian political parties’ national chairman’s annual and presidential campaign fundraising dinners are the most important. Entrance to these dinners is strictly on special invitation and conducted secretly under tight security.
Nick Dazang, deputy director, publicity, INEC, did not take several calls put across to him by our correspondent. As at the time of filing in this report, he had also yet to reply text messages bordering on the subject.
But Dele Adesina, Senior Advocate of Nigeria (SAN), says permissive attitude of virtually all Nigerians towards transparency by political parties regarding their sources of funding is what politicians and the electoral umpire are exploring and thereby promoting corruption.
Calling on Nigerians to rise and ask INEC to do what the constitution empowers it to do by applying sanctions to erring political parties, he says the commission should realize that it does not exist to conduct only elections.
“All the parties that violated the law even in the 2011 INEC financial audit report should be sanctioned; it does not matter whether it is a ruling party or not. This is the reason we can never have credible electoral process and elect true representatives. You can see where the money politics has brought us. If we really want change we must change this money politics where political parties are hijacked by the highest bidder,” says Adesina.
“Sadly, Nigerians are not asking questions. Activists and journalists are not asking this kind of question. Until we start asking hard questions and taking keen interest in our electoral process, we are not going anywhere,” he tells BDSUNDAY.
Parties’ financial activities as captured in the 2011 financial audit report
Accord (A)
The party does not have audited internal financial statement for the year 2011. Conventional books of accounts were not properly kept and maintained by the party. The party did not maintain Fixed Assets and Membership Registers. Also, internal control procedures were not established and budget for the year was not duly implemented. The party financial record keeping for the year was poor in line with General Accepted Accounting Principles (GAAP) and Political Parties Finance Handbook.
Action Alliance (AA)
The party has no prepared Audited Internal Financial Statement for the year 2011. Conventional books of accounts were not maintained by the party. The internal control procedures were not in place. The party did not maintain a Fixed Assets Register for the period. The party claimed to have generated income of N13,900,000 but it expended N26,968,200, N13,068,200 above its stated income.
Advanced Congress of Democrats (ACD)
The party does not have an internal prepared Audited Financial Statement for the year 2011. Conventional books of accounts were not kept and maintained. The party did not maintain Fixed Assets and Membership Registers. Internal control procedures were not established and budget for the year was not prepared. Its income for the year amounted to N150,000 and its expended N44,190,575.
Action Congress of Nigeria (ACN)
The party has an Internal Audited Report and Account for the year under review. Conventional books of accounts were maintained. Budget and budgetary control were in place and the party had a well-defined Fixed Assets and Membership Registers were equally in place. The party claimed that its income amounted to N676,248,437 and it also claimed to have expended the sum of N464,699,974. The auditor’s comment was that the financial statement of the party can be said to be true and fair and the account can be relied upon.
Allied Congress Party of Nigeria (ACPN)
The party has no prepared audited internal financial statement for the year 2011. Conventional books of accounts were not kept and maintained by the party. The internal control procedure was not in place. The party did not maintain both Fixed Assets and Membership Registers for the period. The party claimed to have generated an income amounting to N150,363,465 and also expended N151,237,400 for the year 2011.
Alliance for Democracy (AD)
The party does not have an Internal Audit Report and Accounts for the year 2011. Conventional books of accounts were not kept and maintained. Internal control procedures were not adequately maintained. Budget and budgetary controls were not put in place. The party did not maintain its Fixed Assets and Membership Registers. The party claimed that its total income for the year 2011 amounted to N14,692,035 and it expended the sum of N12,778,009.
African Democratic Congress (ADC)
The party does not have an internal audit report and accounts for the year 2011. Conventional books of accounts were not maintained and the internal control procedures were weak. The party did not maintain an updated Fixed Assets and Membership Registers and the budget for the year was not prepared. The party’s income for the year amounted to N236,500 and it expended the sum of N5,660,366.
All Nigerian People’s Party (ANPP)
The party does not have an Internal Audited Report for the year 2011. Conventional books of accounts were kept and maintained by the party. Internal control procedures were weak. Both Fixed Assets and Membership Registers were not updated. Budget for the year was prepared and maintained. Its income for the year amounted to N768,587,384, while it expended the sum of N893,404,420.
All Progressives Grand Alliance (APGA)
The party does not have an internally prepared and approved Audited Financial Statement for the year 2011. Conventional books of accounts were not properly kept and maintained. The party did not maintain Membership Register at its headquarters. It maintained Fixed Assets without identification codes. Internal control procedures were not established and budget for the year was not prepared. The auditor’s comment was that Pay-As-You-Earn (PAYE) taxes and Withholding taxes were not deducted and remitted to the appropriate authorities during the year under review. The party’s income for the year amounted to N23,750,000 while it expended N280,102,367.
Congress for Progressive Change (CPC)
The now-defunct party which was founded by Muhammadu Buhari did not have an Internal Audited Report and Accounts for the year 2011. Conventional Accounting Records were not kept and maintained by the party. The year’s budget and budgetary control were not in place. The party did not maintain Fixed Assets and Membership Register for the period under review. The party claimed that its total income generated amounted to N304,874,536 and it also expended the sum of N363,570,485.
Citizens Popular Party (CPP)
The party has an Internal Audited Report and Account for the year under review. Conventional Accounting Records were kept and maintained. Internal control procedures were in place. The party maintained both its Fixed Assets and Membership Registers. The budget and budgetary control were in place. The party claimed that its income for the period under review amounted to N26,095,602 and it expended N19,561,168.
Democratic People’s Party (DPP)
The party did not have an audited Internal Financial Statement for the year 2011. Conventional books of accounts were not properly kept and maintained. The party did not maintain Membership and Assets Register. The internal control procedures were weak and the budget for the year 2011 was not prepared. The party claimed to have generated an income of N3,500,000 and expended the sum of N5,767,385 for the year under review.
Kowa Party (KP)
The party does not have an internal audited report and accounts for the year under review. Conventional books of accounts were not properly kept and maintained. The internal control procedures of the party were weak. The party did not maintain both Fixed Assets and Membership Registers. The budget for the year was not prepared. The party claimed that its income amounted to N11,673,095 and it expended the sum of N22,608,276 for the year 2011.
Labour Party (LP)
The party does not have its prepared and audited internal Financial Statement for the year 2011. Conventional books of accounts were maintained. The budget for the year was not in place. The party maintained a Fixed Assets Register without index identification number. The party claimed that its income generated for the year amounted to N129,252,100 and it expended the sum of N132,868,488.
Mega Progressive People’s Party (MPPP)
The party does not have an internal prepared Audited Financial Statement for the year 2011. Conventional books of accounts were not kept and maintained. The party did not maintain a Fixed Assets and Membership Register and the budget for the year was not prepared. The party claimed that the income for the year amounted to N300,000 while it expended the sum of N160,420,000 for the year.
National Conscience Party (NCP)
The party did not show enough conscience towards the law as it does not have an internal Audited Financial Statement for the year 2011. Conventional books of accounts, documentation and maintenance were not kept. Fixed and Membership Register were not properly maintained by the party and the budget which would serve as control for managerial planning and control was not prepared. The party claimed to have generated an income of N2,130,000 and expended the sum of N2,235,785 for the year under review.
New Nigeria People’s Party (NNPP)
The party does not have a prepared and audited internal Financial Statement for the year 2011. Its conventional books of accounts were not properly kept. The party’s Membership and Fixed Assets Registers were not properly kept and maintained. The internal control procedures were not kept and maintained. Its income for the period amounted to N9,463,000 and it claimed it expended the sum of N9,527,425 for the year 2011.
People for Democratic Change (PDC)
The party does not have an audited internal Financial Statement for the year 2011. Conventional books of accounts were not properly kept and maintained. The party’s budget for the year was not prepared and Fixed Assets and Membership Register were equally not maintained. The party also violated section 225(1) and (2) of the constitution in its generation of income and expenditures. The party claimed to have generated an income of N8,000,000 and expended the sum of N7,935,955 for the year.
People’s Democratic Party (PDP)
The party which describes itself as “Africa’s ‘largest party” does not have a prepared internal audited Financial Statement for the year 2011. Conventional books of accounts were not properly kept as required by section 93(2) of the Electoral Act. The party did not maintain Fixed Assets Register both in the headquarters and zonal offices. The party claimed that its income for the year amounted to N647,410,514 and that it expended the sum of N4,352,209,555.
Progressive People’s Alliance (PPA)
The party does not have a prepared and audited internal Financial Statement for the year 2011. Conventional books of accounts were not properly kept and maintained. The party did not maintain Membership Register and its assets register were not made available. The budget for the year under review was not prepared. The party claimed its income for the period amounted to N289,073,041 and it expended the sum of N265,213,325 for the year.
People’s Party of Nigeria (PPN)
The party’s internal audited report and account for the year were prepared but fell short of the standard. Conventional accounting records were not properly kept and maintained. The party did not prepare annual budget for the year under review. Its income for the year amounted to N72,253,597 and it claimed to have expended the sum of N76,907,585.
Social Democratic Mega Party (SDMP)
The party does not have its internal audited report and account for the year 2011. The conventional books of accounts were not kept and maintained. The internal control procedures were not in place. The budget for the year under review was not prepared. The party claimed that its income for the year 2011 amounted to N72,345,080 whereas it expended N72,121,678.
United Democratic Party (UDP)
The party does not have its prepared audited internal Financial Statement for the year 2011. Conventional books of accounts were not kept and maintained. Membership and Assets Registers were not maintained. General internal control procedures were not properly established and budget for the year was not prepared. The party claimed that there was no income during the period under review and it expended N4,402,150.
NATHANIEL AKHIGBE
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