President Bola Tinubu's recent approval of Nigeria's Infrastructure Support Fund (ISF) has sparked a heated debate among lawyers and analysts over its legal legitimacy. The ISF, a government initiative aimed at offsetting the impact of the country's petrol subsidy removal, is intended to revamp transportation and finance projects in sectors like agriculture, healthcare, education, power, and water. However, concerns have been raised about its legal framework.
According to Dele Alake, the Special Adviser to the President for Special Duties, Communications, and Strategy, the ISF will be funded through savings from monthly federal allocations. A substantial amount of N790 billion has been allocated to the Fund from the N1.9 trillion revenue generated by the federation in June.
While the government's intentions behind the establishment of the ISF appear noble, its legal standing has come into question. Analyst Kalu Aja, among others, has argued that there is no legal basis for the creation of this Fund, as it lacks constitutional backing. Aja further suggested that the funds be transferred to the Nigeria Sovereign Investment Authority (NSIA), the legal agency responsible for managing windfall revenues.
Lawyers have rallied behind this argument, affirming that the ISF could indeed be considered illegal due to its lack of constitutional grounding. They contend that the NSIA is the only institution with the legal mandate to manage excess government revenues. The NSIA's legitimacy is derived from the NSIA Act, which was enacted in May 2011.
The NSIA Act empowers the Authority to receive, manage, and invest funds in a diversified portfolio of medium and long-term assets on behalf of the Federal Government, State Governments, Federal Capital Territory, and Local Government Area Councils. The main objective is to prepare for the eventual depletion of Nigeria's hydrocarbon resources.
To fulfill its mandates, the NSIA has established three primary funds. The Stabilization Fund provides budget support during times of economic stress, the Future Generations Fund serves as an inter-generational savings fund for the benefit of future Nigerians, and the Nigeria Infrastructure Fund is intended to invest in domestic infrastructure projects.
As the legal debate surrounding the ISF intensifies, stakeholders are calling for a closer examination of its constitutionality and adherence to existing legal frameworks. Critics argue that channeling the funds through the established and constitutionally-backed NSIA would ensure transparency, accountability, and adherence to the rule of law in managing excess government revenues for the country's sustainable development.
