The NGO Bill And Its Ramifications, By Umar Yakubu
We will fight for what’s right because one understands that more regulations are not the way to solve our country’s problems – Jeffrey Duncan
A lot of furore has been generated in the public space ever since it became known that the House of Representatives has passed through Second Reading, a bill sponsored by Honourable Umar Jubril, seeking the establishment of a Non-Governmental Organisations Regulatory Commission. As a result, the House of Representatives will be proceeding to the committee stage of the lawmaking process where they will be holding public hearings on the bill.
First of all, there is a significant difference between non-governmental organizations (NGOs) and non-profit organizations (NPOs). There is a general misconception about the principles of, and the differences between, NGO and not-for-profit organizations. Understanding the difference is important in explaining some details of the bill and what it intends to regulate, supervise or strangulate.
Non-governmental organizations (NGOs) are created by legal persons who are not part of the government. However, though they maintain a non-governmental position, their funds are mainly raised by the government or governments as well as other bodies. There are various types of NGOs which include ‘International NGO, Technical Assistance NGO, Humanitarian NGOs, Environmental NGOs, Donor Organized NGO and several others.
For example, international NGOs such as the Medicins Sans Frontieres (Doctors without Borders), receive substantial funding from governments to carry out humanitarian activities all over the world. Some NGOs are founded through private philanthropy such as the Gates and Ford Foundations. They also go through established governments and bureaucratic systems to reach areas and communities that they intend to deliver assistance.
The drafters and sponsors of the bill need to understand various categories of NGOs before putting pen to paper. The organizational structure, intensive bureaucracy, painstaking processes and due diligence encountered to access grants and funds from such bodies is wider and possibly more effective than what the bill intends to achieve. In fact, most are supervised by the United Nations. Also note that these NGOs, due to their substantial funding, are coming to either directly execute their projects in identified areas in collaboration with Local, State or Federal Government.
For Nigeria, the point of entry is the Federal Ministry of Budget and National Planning. Though most NGOs accurately document their objectives with the Ministry, the Corporate Affairs Commission (CAC) comes in with CAMA stick and demands for annual returns. Knowing fully well that they are exempted from tax, they must register their ‘exclusion’ with the Federal Inland Revenue Service (FIRS).
Then they hop to the Special Control Unit against Money Laundering (SCUML), under the Federal Ministry of Industry, Trade and Investment (FMITI) to register with the same CAC and FIRS documents to ensure they are not used for money laundering or terrorist financing activities.
From there, they would register at the State or Local government of concern even though they came through Abuja through a line Ministry. Then you have the Financial Reporting Council, whose mandate seems to be an amalgamation of ICAN and ANAN. The same set of documents, issued by government agencies, are used to register with other government agencies. So much for cooperation.
So the current situation is a complicated and bureaucratic process which is entirely unnecessary for NGOs. These bodies, of which more than 95% are international, always go through such hassles because they want to render humanitarian assistance.
On the other hand, the non-profit organizations (NPOs) are service organizations or charities that are established for co-operative, trust or purely informal reasons. They offer services and programs by raising funds from individuals and endowments. So our associations, clubs, advocacy groups and religious bodies, the super-hypersensitive area, fall into this category.
Because of their informal nature, divergent objectives and complicated structures, it is presumed that this is the area that the bill wants to tackle. The fact is that in most responsible democracies, NPOs have legal responsibilities similar to other companies that are registered within a country. The significant difference is with regard to tax exemption.
Proponents of the bill have argued that there is the need for government to establish a mechanism which regulates the establishment, funding and activities of “NGOs” operating in the country. They further argued that NGOs are conduits for the laundering of funds in and out of the country. They express sentiments on how NGOs (pardon the continuous use) business is most ‘lucrative ‘ venture especially in the North East of Nigeria.
There are reports of them being used to soliciting and obtaining funds from International and National donors under the guise of providing relief materials and succour for internally displaced persons, but they end up diverting these funds for other purposes. The main argument of the proponents is for stopping misappropriation of funds by NGOs.
The opponents of the bill are enraged. Professor Odinkalu, a well respected and patriotic Nigerian is all over twitter. He opines that it will be used constrain the civic space and destroy dissent and hence, a danger to Nigeria’s democratic setting. The Catholic Church has said it is a selfish and disingenuous bill that would lead to persecution. The Pentecostal Fellowship of Nigeria says that the government its “poking its nose into the affairs of the church”, and should focus more on other more important issues.
The Chief Imam of Issa-Elele Central Mosque is requesting the government not to interfere in affairs of mosques because it’s poking its nose in the affairs of God. A similar stand was taken by the Chief Imam of Ansarudeen referring that financial affairs of the mosque should not be regulated. I think since there is no umbrella body for NGOs, so there is no harmonised response on the matter.
Apart from the drafting defects and other inconsistencies, the bill aims to promote and ensure accountability. But in trying to ensure transparency, there are elements of duplication of duties because there will need to register (after CAC, FIRS, SCUML, State government and whatnot) their activities with the new agency. It seems like registration exercises give government agencies some feeling of control and authority. Usually, after registration, no regulatory or supervisory activity ensues afterwards unless for revenue generation.
There are also duplications of penalties that are already existing in other laws. So there is a logical argument by the opponents that a new law is not necessary because the existing ones have not been adequately implemented. As usual, we like to quote US and UK when we what to justify an argument, such as citing the Charity Commission of the UK. What we fail to consider is that there is deep mistrust between the government and its citizens and hence the trepidation that it would turn out to be like other ineffective government agencies.
Curiously, none of the opponents have addressed the question about the level of misappropriation within NGOs. Several NGOs around the world have been used for drug trafficking, arms trade, human trafficking, financing of terrorism, terrorism, tax evasion, money laundering and so many other vices that affect the security of the nation.
If our houses are clean, why is there so much apprehension over regulation especially within our churches and mosques? Professor Odinkalu stated that “our churches will be out of business and the mosques will be endangered”. How? Religious bodies could be run like a business but should not be businesses. I would have expected the ‘houses of God’ to be the first in calling for accountability.
Our Governors wives also float NGOs, and billions have been syphoned through such means. Some use their position of power to ‘channel’ local and international NGOs to fund their programmes. Other coerce private organization to contribute to ‘Madams pet project’ before signing off on contracts. Evidence of terrorists being supported, transportation of hard drugs, movement of arms and cash, smuggling of illicit goods using NGOs have been well documented in Nigeria and other regions.
It’s possibly the lack of regulation that leads to lack of corporate governance in NGOs because most Trustees are members of the same family or friends. That’s probably the main crux of the resistance to targeted regulation. The culpable don’t want scrutiny and hence tend to exaggerate the potential for abuse by public officers and politicians.
In the interim, what may be done is to enforce existing legislation. Each registered entity submits its constitution to the CAC for approval and allows them to govern themselves through the constitution. If there are evidence of infractions through non-compliance, I want to assume that the CAC has an Enforcement Department with remunerated staff. The same goes for the other regulators and supervisors such that are meant to ensure conformity with statutory laws.Enforcement by FIRS, SCUML, FRC and plethora of others is essential.
The new agency may just come and join the fray of inadequate implementation of regulations. The agencies are supposed to report evidence of criminal activity on fraud, money laundering, financing of terrorism and other crimes to existing law enforcement agencies. If the current system is not working, I doubt if another law, with our current culture, would be the solution.
Executive Director – Center for Counter Fraud Awareness