The President of the Federal Republic of Nigeria recently assented to sixteen (16) Constitution Alteration Bills, some of which have decentralised certain critical sectors of the economy previously controlled by the Federal Government.
Notable sectors of the economy affected by the amendments are railway and electricity. We have provided commentaries on the implications of the amendments in these two sectors and the business opportunities that these portend.
Highlights Of The Constitutional Amendments On Railway And Electricity
Nigeria operates a federal system of government, and under the Constitution of the Federal Republic of Nigeria, 1999 (As Amended) (the “Constitution”), the country’s law-making powers are shared between the Federal Government on one hand, and the thirty-six states of the Federation on the other hand. The National Assembly is conferred with powers to make laws for the Federal Government and the Federal Capital Territory (FCT), while the Houses of Assembly are empowered to make laws for their respective states.
The Second Schedule to the Constitution provides for matters within the exclusive and concurrent legislative lists. The National Assembly has the legislative competence over matters in the exclusive list while both the National and the Houses of Assembly are empowered to legislate over matters in the concurrent legislative list.
Prior to the amendments, railway was on the exclusive legislative list of the Constitution, but the Fifth Alteration Bill No. 16 (“Act No. 16”) has now removed railway from the exclusive list and transferred it to the concurrent legislative list, thereby giving powers to both the Federal and State governments to regulate the subject.
With respect to electricity, this subject matter has always been on the concurrent legislative list of the Constitution. In other words, both the National Assembly and the Houses of Assembly were empowered under the Constitution, to legislate on the subject of electricity. However, the extent to which the Houses of Assembly could make laws on electricity was circumscribed.
Prior to the passage of the Fifth Alteration Bill No. 17 (“Act No. 17”), paragraph 14(b), Part II of the Second Schedule to the Constitution provided that “a house of assembly may make laws for the state with respect to the generation, transmission and distribution of electricity to areas not covered by a national grid system within that State.”
The effect of the above provision of the Constitution was that whereas the National Assembly could make laws on all aspects of the electricity value chain in all parts of the country, the House of Assembly of a state could only legislate in areas within the geographical location of the state, that were not covered by the national grid.
While the geographical location of a state has never been in issue, determining those areas of a state that are not covered by the national grid was complicated and caused extensive debates as the national grid currently traverses all the states of the Federation. The Constitution offered no guidance for the interpretation of this provision and there has so far been no known judicial pronouncement on the issue, leaving much room for uncertainty.