By Ayodele Babalola
Introduction
Campaigns for the presidential election in Nigeria will officially commence on September 28, 2022. Campaign finance issues usually take the front burner leading up to elections in Nigeria but fizzle out after elections. Campaign finance reform is given seasonal attention – a situation occasioned by the neglect of the entirety of the campaign finance legal framework in Nigeria. In 2020, I wrote Nigeria’s first and only campaign finance law textbook – The Nigerian Campaign Finance Law. I succeeded in filling a void in our legal jurisprudence and in ensuring that compliance, research, analysis and practice becomes less cumbersome. Compliance with campaign finance laws is crucial to the strengthening of our elections and democracy. My book answers most of the campaign finance questions being raised in the Nigerian political space recently. Campaign finance laws regulate aspects like sourcing, expenditure, disclosure, penalties and enforcement. The main purpose of regulating campaign finance is to ensure transparency in how money is raised and spent during election campaigns, stop corrupt practices, limit the impact of money on the electoral process and install electoral.
integrity.
Building up to the 2019 elections in Nigeria, vote buying which is a campaign finance violation dominated the conversations in the political space. Moving towards the 2023 elections however, the headlines have been flooded with discussions on the legality or otherwise of political crowdfunding and diaspora donations. It is widely reported that Nigerians in the diaspora have formed groups of committees to launch crowdfunding initiatives for the Presidential Candidate of the Labour Party (LP), Mr Peter Obi. It was also reported that there is a plan to unveil in the coming days a crowdfunding portal with a target to raise $150 million from Mr. Peter Obi’s supporters in the diaspora and N100 Billion from those in Nigeria. This news has been met with different opinions with respect to the legality of crowdfunding and diaspora donations. As an expert in campaign finance law and analysis, I deemed it proper to weigh in on the issues.
Legal Analysis
Legal provisions that impact campaign finance in Nigeria can be found in quite a number of laws. However, the primary sources are – the Constitution of the Federal Republic of Nigeria (CFRN) 1999 (as amended) and the Electoral Act (2022).
Section 225(3)(a)(b) of the CFRN prohibits political parties from holding or possessing funds or assets outside Nigeria or from retaining any funds or other assets remitted or sent to it from outside Nigeria. The CFRN also places an obligation on political parties to remit funds or assets sourced from outside Nigeria to INEC within twenty-one (21) days of receipt. Section 85 of the Electoral Act (2022) makes the contravention of Section 225(3)(a)(b) of the CFRN an offence which upon conviction makes such funds or assets liable to forfeiture to INEC and the political party involved liable to a fine of at least Five Million Naira (N5,000,000.00). The above stated provisions generally prohibit political parties from sourcing for funds “from outside Nigeria” – this seems wide enough to include Nigerians in diaspora. What this means is that Nigerian campaign finance laws prohibit donations from Nigerians in diaspora to a political party in Nigeria. Quite notably, there is no constitutional or statutory provision prohibiting candidates from receiving funds and assets from outside Nigeria – this includes from Nigerians in diaspora. What this means is that Nigerian campaign finance laws presently does not prohibit donations from Nigerians in diaspora to Mr. Peter Obi or any other presidential candidate.
The Electoral Act (2022) and the INEC Guidelines and Regulations for Political Parties (2013) shows clearly that political parties and candidates can separately source, spend and account for campaign finance. The Electoral Act also provides for separate liabilities for violations of campaign finance laws for both the political parties and candidates. The candidate is a flagbearer of the political party. However, the position being canvassed in some quarters that a candidate cannot independently source, spend and account for his/her own election expenses is unfounded and unknown to our present laws. Both the candidate and political party can independently or jointly finance campaigns by the present state of our laws.
The Place of Political Crowdfunding
A Candidate can legally crowdfund for campaign donations in Nigeria. However, each donation by individuals is subject to a statutory cap of Fifty Million Naira (N50,000.00) as provided for by Section 88(8) of the Electoral Act (2022). This is a drastic shift from the previous cap of One Million Naira (N1,000,000.00) under the Electoral Act (2010).
The presidential candidate is also subject to a spending cap of Five Billion (N5,000,000,000.00) Naira for election expenses as provided in Section 88(2) of the Electoral Act (2022). Very importantly, there is no cap on how much a candidate can raise for elections – the cap is on his/her spending.
Political parties can also crowdfund in Nigeria. This a great way for them to raise funds from their base and the grassroots. There is presently no cap on what an individual can donate to a political party in Nigeria. However, Section 87(1) of the Electoral Act (2022) gives INEC the power to place a limitation on the amount of money or other assets that an individual can make to a political party. This power is yet to be exercised.
Who can contribute to Election Expenses in Nigeria?
A pertinent issue that needs to be examined is whether an organization that is not a political party can donate or coordinate the donation of funds to a candidate or a political party in Nigeria. The CFRN prohibits any other association other than a political party from canvassing for votes for any candidate at any election, or contributing to the funds of any political party or to the election expenses of any candidate at any election. Therefore, while Nigerians in diaspora may not be expressly prohibited from making individual donations to candidates, the same cannot be said about donations from associations and organizations. Such donations are unconstitutional as they violate Section 221 of the CFRN. Companies are also prohibited from making direct or indirect donations or gifts of property or funds to a political party or political association, or for any political purpose by virtue of Section 43 of the Companies and Allied Matters Act 2020.
Conclusion
In summary, Nigerian campaign finance law does not prohibit political crowdfunding by candidates in an election. Each individual donation however should not exceed the statutory cap of Fifty Million Naira (N50,000,000.00) as provided in Section 88(8) of the Electoral Act (2022). Political parties are prohibited from owning funds and assets outside Nigeria and from retaining funds or assets sent to them from outside Nigeria. This amounts to a prohibition of donations to political parties from Nigerians in diaspora as well. However, neither the CFRN nor the Electoral Act prohibits donations from outside Nigeria to candidates. The present state of the law is that Nigerians in diaspora can make donations to candidates in an election as long as each donor does not exceed the statutory cap.
Way Forward
Countries adopt different policy postures with respect to donations from “foreign sources”– donations from foreigners, foreign governments and foreign companies. While some allow these donations, others prohibit them. The underlying policy objective for such prohibition is to protect their elections and democracy from foreign interference. It seems like it is the intention of our law makers to adopt the prohibition of political donations from foreign sources. To communicate this intention quite clearly, the phrase “from outside Nigeria” in Section 225(3) of the CFRN with respect to donations to political parties seems way too broad – it has succeeded in putting donations from Nigerians in diaspora and from foreign sources under the same category of prohibited sources. This should not be so. An amendment of our laws to prohibit donations to political parties from “foreign sources” and a definition of foreign sources in the interpretation section will suffice. This will pave the way for the legalization of donations from Nigerians in diaspora to political parties as well.
I will conclude by stating clearly that presently, there is no prohibition of donations from Nigerians in diaspora to candidates. More importantly, we cannot have a credible and legitimate democratic process if campaign finance laws are breached. As we approach the campaign season, I call on all the candidates vying for the various elective positions to engage campaign finance professionals and acquaint themselves with campaign finance laws. Nigerians expect full compliance with campaign finance laws before, during and after the elections. The world is watching.
Author: Ayodele Babalola is the Lead Counsel at AOB Willows LP and the Author of “The Nigerian Campaign Finance Law,” Nigeria’s first and only campaign finance law textbook. He is a Campaign Finance Law Analyst and has previously provided campaign finance analysis assistance to an international election observation organization. You can reach him via email: ayodelebabalola84@gmail.com or ayobabzy@yahoo.co.uk.