Limitation of Campaign Expenditure: Matters Arising -By Eze Onyekpere

There are several reasons informing the legal provisions on the limitation of the expenditure of candidates in elections. The most critical appears to be the need to limit the influence of money in politics, to provide a level playing ground for candidates, to mainstream issues-based politics and ensure that votes count.

The Electoral Act 2010 (as amended) in section 91 subsections (1) to (9) provides for limits to campaign expenditure of candidates in elections: The expenses of presidential candidates shall not exceed N1 billion; gubernatorial candidates are limited to N200 million; Senate and House of Representatives members to N40 million and N20 million respectively. Others are State Houses of Assembly and local government chairmanship candidates who are limited to N10 million, while councillorship candidates have a N1 million ceiling. The Electoral Act goes further to state that in determining the total expenditure incurred in relation to the candidature of any person in any election, no account shall be taken of:- (a) any deposit made by the candidate on his/her nomination in compliance with the law; (b) any expenditure incurred before the notification of the date fixed for the election with respect to services rendered or material supplied before such notification; and (c) political party expenses in respect of the candidate standing for a particular election. The Act rounds off by stipulating that no individual or other entity shall donate more than N1 million naira to any candidate.

Eze Onyekpere

A number of issues arise from these limitations provided in the Electoral Act. The first is in its placement in the body of the Act, with the implication that any sought alteration will require the amendment of the law by the National Assembly and the assent of the president, which is a long and cumbersome process. It is probable that these figures made sense at the time the law was enacted, however the subsequent erosion of value through inflation and depreciation of the naira has meant that these figures need to be reviewed. Since 2010, when the Act was enacted, the naira has lost over 140 per cent of its value. The exchange rate was N150 = $1 in 2010, in comparison to today’s N360 = $1. Ideally, such alteration should have been a power granted to the Independent National Electoral Commission (INEC) in consultation with stakeholders (political parties, the Central Bank of Nigeria, National Bureau of Statistics, civil society, etc.), to review these limits from time to time.

The second issue is that the logic and empirical basis of the above limitations were not articulated in the Act and the Independent National Electoral Commission or the National Assembly has not come out with any justification for such. Is it based on the number of voters to be reached by the candidate, the land area to be covered or media and other expenses? The ceilings appear arbitrary. For instance, if a presidential candidate with 36 states to cover is to spend N1 billion, why should the Act allow a gubernatorial candidate of only one out of 36 states be allowed to spend one-fifth of the presidential candidate’s ceiling? If a senatorial zone is one third of a state, why did the Act not grant senatorial candidates one-third of the governor’s ceiling? What is the relationship between the area covered by a senatorial seat and that of a House of Representatives seat? The provision of S.84 (2) of the repealed 2002 Electoral Act provides a clue on what is to be done:

“Election expenses incurred by a Political Party for the management or the conduct of an election shall not exceed in the aggregate the sum determined by multiplying 20 Naira by the number of names appearing in the final voters’ list for each Constituency where there is a candidate sponsored by the Political Party”.

This kind of provision offers an empirical foundation for expenditure by candidates and political parties and places a limitation which can be monitored and enforced. Again, the area and number of persons to be reached by the campaign and the expenditure should have a proportional relationship, rather than the arbitrary fixing of limits in the extant law. Thus, this kind of provision in the repealed 2002 Act should be used to place limits for the expenditure of candidates and parties.

The third issue is in respect of the exclusion of any expenditure made before the notification of the date fixed for election. It appears that the Act is encouraging the front-loading of expenditure by candidates, since these expenses will not be taken into cognisance in determining the total expenses. The implication of this development is that in practical terms, there is no real expenditure limit, as candidates can always rely on the loophole in the law to exceed the limits. It is a notorious fact that delegates electing candidates demand and receive money and generally vote for the highest bidder. These monies are disbursed sometimes in foreign currencies, such as the United States dollar. The exclusion of this huge expenditure arena creates a big loophole in the law.

This further raises a fourth issue, which is that of the huge expression of interest and nomination fees charged by political parties for aspirants seeking elective offices. The exclusion is “any deposit made by the candidate on his/her nomination in compliance with the law”. The poser is: Which law provides for political parties to charge huge expression of interest and nomination fees? I am yet to find the enabling law under which political parties charge these huge fees. This is exclusionary and starts the process of the monetisation of politics from the outset. An erudite legal scholar (Femi Falana, SAN) has postulated on the legality of fees chargeable by political parties as follows:

“The conditions for contesting elections from local government to the House of Assembly, governorship, House of Representatives, Senate, presidential levels are all in the Constitution. There are decisions of the court to the effect that the Independent National Electoral Commission and State Electoral Commissions cannot collect fees from candidates who are contesting elections. So, if I am going to contest election, you cannot ask me to pay N27 million as nomination fee because this is unknown to the Constitution. Therefore, the parties cannot decide their own rules. They cannot impose prohibitive rules that will restrict the participation in the contest of an election to money bags”.

This discourse adopts the position in the above postulation and insists that what is required is for aspirants to challenge these huge fees in court for a definitive ruling on the subject matter. Although political parties see nomination fees as the avenue for raising funds, this should not be allowed to become an impediment to the right to run for elected office. It is a commendable practice when parties reduce or even remove the cost of nomination and expression of interest to disadvantaged groups, such as women and people living with disabilities. But this is just the beginning of the process, as it will not facilitate the emergence of women as candidates and elected officials due to the large volume of funds required to get to that level.

The fifth issue is that political party expenses are also excluded. The implication is that parties have the leeway to expend enormous resources to support their candidates outside of the candidates’ expenditure ceilings. It may be difficult to draw a reasonable line between the expenditure of candidates and those stricto sensu made by a political party. This is an arbitrary and unreasonable exclusion. Thus, the limitation should apply to both candidate and political party expenditure.

Pray, what is the definition of political party expenses with respect to a candidate standing for election? S.92 (1) of the Act defines election expenses as those incurred by a political party within the period from the date that notice is given by the Commission to conduct an election, up to and including the polling day, with respect to the particular election. Further, section 92 (2) offers an insight by simply stating that election expenses incurred by a political party for the management or conduct of an election shall be determined by INEC, in consultation with political parties. Thus, the definition is still awaiting a clarification meeting between INEC and the political parties.

The sixth issue pertains to the absence of restrictions on some donations/donors. The Act should have introduced the concept of “permissible donor” to bar government contractors, contributors by proxy or in the name of another, and persons who in the last five years have been convicted of offences involving fraud or dishonesty, defrauding a treasury and dealing with psychotropic substances, from contributing to the coffers of political parties and candidates. And a reaffirmation should have been made on the bar on corporate donations and this will include statutory corporations, incorporated charitable associations like churches, non-governmental organisations, etc.

The seventh issue is that of in-kind donations or other resources apart from money. If the limitation is financial, the implication is that services or other resources worth more than N1 million can be donated. The Act should have unequivocally avoided this controversy. However, it can be affirmed from the Political Party Finance Handbook and Manual that the ceiling applies to financial and other resources. In some jurisdictions, donations are more clearly defined, for example in the United Kingdom.

The eight issue is the silence of the Act on third party expenditure. Thus, third parties seem to be at liberty to spend any amount of money on a candidate, subject to the overall limitation of N1 million. But if these third parties are associations, they have been barred by S. 221 from canvassing for support or spending money on behalf of candidates or political parties. Third party expenditure can create a leeway for a candidate to continue spending on his campaign (after he has reached the ceiling) if he transfers the money to the third parties.

The ninth issue arising is that the Act is silent on the tax status of donations and contributions to candidates and political parties. Ideally, the donations should earn tax credits as a tax deductible expense. But this will be limited to donations not more than N1 million allowed for individuals under the Act. This will encourage popular participation in campaign finance (funding political parties and candidates at elections) and reduce the influence of money bags in politics. Thus, the mischief of the overbearing influence of money bags and godfathers will be suppressed, while the remedy of involving a large part of the population in party financing will be advanced.

The tenth and final issue is that the sums of permissible expenditure are low if the actual cost of elections is taken into consideration. The actual costs include the media in the print and electronic formats, payment for venues, hotels, staff, offices, administration, cost of rallies, etc. It should be upwardly reviewed, especially at the presidential and gubernatorial levels, on the basis of the empirical considerations earlier discussed.

In conclusion, these provisions need to be reviewed if we are to improve the campaign finance regime in Nigerian elections. The above recommendations for improvement are based on the lessons of campaign finance monitoring experience.

Eze Onyekpere is the lead director at Centre for Social Justice.