The problem of unregulated use of money in politics did not begin today. There
are antecedents in the history of modern Nigeria, beginning with the politics of
nationalism in the 1950s, similar to rent-seeking behaviours of parties,
politicians and voters. For example, the absence of strict legislation to regulate
party finance made it possible for politicians and political parties to engage in
illegal party financing and corruption in the Nigeria’s First Republic. The
electoral laws under which elections were conducted in the 1950s and 1960s
were derived from the provision of the British Representation of the Peoples Act
of 1948/9 and its regulations. The 1959 elections were conducted under the
provision of the Nigeria (Electoral Provisions) Order-in-Council, LN 117 of
1958 enacted by the British Parliament. During this period, there was no clearly
defined regulatory framework on party finance and political party funding was
primarily carried out through private parties since candidates were responsible
for election expenses. Two cases of corruption involving political parties were
judicially investigated. In 1956, the Foster Sutton Tribunal of Enquiry
investigated allegation of impropriety in the conduct of some politicians from
the National Council of Nigerian Citizens (NCNC) with business interests in the
African Continental Bank (ACB). Similarly in 1962 the Coker Commission of
Inquiry was set up to look into the affairs of six Western Nigeria public
corporations allegedly involved in corruption with the leadership of the Action
Group.
During Nigeria’s Second Republic (1979 -1983), a combination of private
and public funding was used for the first time. Political parties occupied the
central position in politics of the Second Republic. The 1979 Constitution of the
Federal Republic of Nigeria clearly stated, “No association other than a political
party [was allowed to] canvas for votes for any candidate at any election or
contribute to the funds of any political party or to the election expenses of any
candidate at an election.” The 1979 Constitution in Section 205 empowers the
National Assembly to make laws “for an annual grant to the Federal Electoral
Commission from disbursement to political parties on a fair and equitable basis
to assist them in the discharge of their function.” The government rendered
financial assistance to political parties by way of subventions. In addition,
private funding, except from outside Nigeria, was allowed, according to Section
205 of the 1979 Constitution. There was no limit on how many corporate bodies

and individuals could contribute to political parties. Apart from the ban on
political parties receiving external funds as in Section 205 of the 1979
Constitution, and the prohibition of associations other than political parties from
making contribution to the funds of political parties or the election of any
candidates at any election, as in Section 201 of the 1979 Constitution, there were
no stricter constitutional or statutory regulations on the use of party financing
such as those of disclosure of donations. The result was illegal use of money to
influence decision making in political parties and the political process in
general.
Although the 1979 Constitution provided some form of check especially
with respect to external control of political parties, but even that was not
achieved in the 1979-1983 elections. The loopholes were exploited by the
financially and politically ambitious few who were able to use their wealth to
hijack political parties of their choice. With unbridled use of money, little or no
attention was paid to political mobilization by those seeking elective positions.
Politicians attached much importance to money which they used to buy the votes
of the electorates. One example was the occasion in Lagos in 1982 where ten
members of a political party donated N5 million at a fund-raising ceremony. The
experiences of the 1979 and 1983 elections were such that political parties and
politicians had unrestricted freedom to use money from both legal and illegal
sources to finance their campaigns and other activities associated with their
election expenses. During the Second Republic, the role and activities of
‘contractors’ in government and political parties and other cases of political
‘patronage’ became very rampant. The reports of the various special tribunals
that tried politicians and office holders revealed gross abuse of public office and
impropriety in dealing with political parties.
The 1999 Constitution of the Federal Republic of Nigeria basically
reproduced the 1979 Constitution with some substantive amendments. Under
the 1999 Constitution, the Independent National Election Commission (INEC)
has constitutional responsibility to monitor the finances of political parties,
conduct an annual examination and audit of the funds of political parties and
publish a report for public information. Section 228(c) of the 1999 Constitution
gives power to the National Assembly to provide for an annual grant to the
Independent National Electoral Commission (INEC) for disbursement to
political parties on a fair and equitable basis to assist them with their functions.
Accordingly, the National Assembly approved a N600 million budget for the 30
registered parties in the April 2003 general elections. INEC disbursed N180
million to all political parties at N6 million each in accordance with Section
80(2)(a) of the 2002 Electoral Act: “30% of the grant shall be shared among the
political parties participation in respect of a general elections for the grant has
been made.” In accordance with Section 80(2)(b) of the 2002 Electoral Act,
N420 million was disbursed by INEC to seven political parties which include:
the Alliance for Democracy (AD), All Nigerian Peoples Party (ANPP), Peoples’
Democratic Party (PDP), All Progressives’Grand Alliance, (APGA) , National
Democratic Party (NDP), Peoples Redemption Party (PRP) and United Nigeria
People’s Party (UNPP).
The responsibility to monitor the use of money in campaign activities of
politicians and their parties poses some challenges for the Commission. For
instance, during the 1999 elections there were complaints and allegations by
civic group about large donations by influential political figures and
businessmen to some parties. The Transition Monitoring Group – a coalition of
civil society organizations, in a statement on the conduct of the PDP, ANPP,
UNPP, and NDPprimaries in January 2003, complained, “there was widespread
bribery of delegates with sacks stuffed with money to influence their votes.”
Also, Sarah Jibril, one of the presidential candidates in the 2003 elections
petitioned the leadership of her party over alleged misappropriation of funds.
The Commission was able to investigate some of the reported cases and even
monitored party finances to some extent. For instance, following the reported
allegation of mismanagement of funds released to political parties by INEC, the
Commission in September 2003 ordered an audit on four political parties. But
for very long time INEC was unable to perform audits or issue reports on the
finance of political parties due mainly to a lack of cooperation from most of the
political parties.
Section 84(3) of the 2002 Electoral Act states, “Election expenses of
Political Party shall be submitted to the Commission in a separate audited return
within three months after polling day and such shall be signed by the party’s
auditors and countersigned by the Chairman of the Party as the case may be and
shall be supported by a sworn affidavit by the signatories as to the correctness of
its contents.” In the case of the 2003 elections the due date for submission of the
audited report of political parties was 3 August after the final polling day of 3
May 2003. Most political parties violated the deadline and by the end of 2003
only a few submitted their reports to the Commission.
Admittedly details of subventions to political parties are not readily
available. There are no available record on the exact amount of money spent by
candidates and political parties in Nigeria. However, there are indications of
heavy reliance on private funding in all the three elections in Nigeria since 1999;
more so that virtually all parties lack organizational capacity to generate their
own income through legitimate means. According to former President
Obasanjo, “the parties and candidates together spent during the last elections,
more than would have been needed to fight a successful war.” This view of
President Obasanjo is corroborated by a perceptive writer who observed, “More
than any election in Nigeria’s chequered political history, the 2003 national
elections was determined by how much money candidates had. The electoral
process has become so expensive that only the rich or those dependent on rich
backers can run.” The writer also noted, “There is also the disturbing trend of
questionable business people backing candidates with grey money.” The
increasing influence of ‘godfatherism’in contemporary Nigerian politics can be
linked to uncontrolled party financing as witnessed in both Anambra and Oyo
States where State Governors had to negotiate and renegotiate peace with
‘godfathers’and money-bags politicians who claimed to have helped them win
elections by all means! The absence of effective regulation of the amount of
private funding that political party can receive from private sources made all
forms of political mercantilism attractive and possible.
For the 2003 general elections, political parties received funding from the
public purse via grants approved by the National Assembly in pursuant of
Subsection (1) of Section 80 of the 2002 Electoral Act. This money was
insufficient to sustain parties and therefore they obtained funding from private
sources. One source of funding for political parties during the 2003 elections
was the Nigerian business community. For example, Corporate Nigeria was the
chief fundraiser of the Obasanjo/Atiku campaign. While there was no law
against political donations by private individuals, the Companies and Allied
Matters Act (1990), Section 308, prohibits corporate bodies from making
political donations. Some have spoken about the contradictions in the two laws
and suggested the need to set an explicit reference to permitted sources of
funding (including corporate donors, state owned companies, state institutions).
The 2007 general elections were conducted with the 2006 Electoral Act, a
hallmark of the electoral reform process led by the Obasanjo administration.
However, many unresolved issues around party finance and corruption still
exist. Public funding is guaranteed for political parties in Section 228(c) of the
1999 Constitution as well as Sections 90 and 91 of the 2006 Electoral Act.4
Section 90 of the 2006 Electoral Act states that the National Assembly may
approve a grant for disbursement to political parties contesting elections. Also,
Section 91(1) says the National Assembly may make an annual grant to INEC
for distribution to political parties to assist them in their operations. These
funds, according to Section 91(2) (a & b) are to be shared on a ratio (10:90) in
favour of parties that have representation in the National Assembly. However,
following the decision of an Abuja Federal High Court on the case filed by the
Citizen Popular Party (CPP) and nineteen other opposition parties,5 INEC was
left with no other option but to share funds among political parties equally.
Apart from public funds, electioneering campaigns and other party activities,
the 2007 elections were supported through private sources including monies
and in-kind contributions made to political parties or candidates from:

subscriptions, fees and levies from party membership,6 fines, proceeds from
investments made by the party, subventions and donations, gifts and grants by
individuals or groups of individuals as authorized by the law, loans, interests on
savings, and sale of party nomination forms, etc.7
Reliable data on the costs of election campaigns and other related activities
in Nigeria is difficult to obtain. Research in the area of party finance is
underdeveloped in the country; hence, advocacy for policy change are rarely
based on adequate information and good knowledge of the various dimensions
of the problem. These notwithstanding, there are growing concerns about high
costs of election campaigns and other related activities and the implications for
political corruption in the country.