LG Funds: Govs Revolt Against NFIU Guidelines

The nation’s 36 state governors have jointly rejected the new guidelines on the operations of state-local government joint accounts saying that they cannot be severed from the accounts as recommended by the Nigerian Financial Intelligence Unit, NFIU.

The new guidelines which are supposed to become operational from June 1 among others limit cash withdrawal from local government accounts to a maximum of N500,000 daily with banks under threats of strict sanctions if they disobey.

The state local government joint account has been the cash cow for many states with many governors refusing to conduct local government elections for the purpose of appointing lackeys to superintendent over the accounts.

The Nigerian Governors Forum, NGF in  a statement issued by by NGF Head, Media and Public Affairs, Abdulrazaque Barkindo said the governors took the decision at their meeting on May 22, 2019.

“The Nigeria Financial Intelligence Unit (NFIU) enforcement and guidelines to reduce crime vulnerabilities created by cash withdrawals from Local Government Funds throughout Nigeria which is to take effect from June 1 is an aberration.  It defies logic. It has therefore been rejected by all the 36 governors of the federation at their last meeting of May 22, in its entirety because it is not only revisionist but issued in bad taste.

“It is revisionist because it portrays the NFIU as an agency that is totally oblivious of the workings of states and Local Governments in the country and it at once exposes the NFIU as either over-ambitious or trying hard to impress the presidency. In a nutshell, the so-called NFIU guidelines portend imminent danger for the nations nascent democracy and if left to flourish may also impede the smooth running of Local Government administrations throughout the country.

“For a start, Section 7 (6) (a) and (b) of the constitution confers on the States and National Assemblies the powers to make provisions for statutory allocation of Public revenue to the Local Councils in the Federation and within the states respectively. Similarly, Section 162 (6) of the same constitution expressly provides for the creation of the States Joint Local Government Account (SJLGA) into which shall be paid all allocations to the LGAs of the State from the Federation Account and from the government of the state.

“Most importantly, S 162 (7) of the constitution goes on to confer on the NASS the power to prescribe terms and manners in which funds from the SJLGA may be disbursed and in Subsection (8) the constitution empowers the State Houses of Assemblies prescribe the manner in which the amount standing in credit to the credit of Local Government Councils in the state shall be distributed.

“Therefore, to observe the NFIU guidelines is to hold the Constitution of the Federal Republic of Nigeria in breach. This is because nothing in the NFIU Act 2018 gives the NFIU the powers that it seeks to exercise and in giving those guidelines, the NFIU is acting in excess of its powers and in strict violation and disregard for the constitution of the country.

“If the NFIU had bothered to confer with the relevant stakeholders of the Joint Accounts it would have understood the rudimentary aspects of the accounts that make it impossible, incongruent to reason and impracticable for any authority apart from the constitution, to sever states from that account. Essentially, states augment the services of the Local Governments of the country in areas where the Local Government finances fall short. A very critical example is teachers’ salaries. If states were to be rusticated from JAC, most Local Governments in the country would be unable to pay teachers salaries. It is the same for healthcare delivery. The Primary Healthcare Under One Roof PHCUOR program, where various programs for supplementary healthcare is now being provided for the lowest cadre of ordinary Nigerians is heavily dependent on States’ finances. These two critical areas are massively subsidized by various state governments on a regular basis, not minding insecurity and the environment.

“It may interest the public to know that state governors are not fighting willy-nilly to keep Local Government administrations under them. It is the constitution that keeps them there. Besides, instead of accusing state governments and governors of playing around with Local Government funds, it is the Local Governments that owe state governments, in most cases. These debts run into billions, which the Local Council administrations can ill afford. The general public should also know that binding the Local and state government resources together in JAC is not an error of judgement on the part of the originators of the constitution. There are still Local Government Councils in this country that have no bank accounts and only draw from the JAC, so where would the Central Bank of Nigeria or the commercial banks post their allocations to?

“Local Governments anywhere in the world are an appendage of state governments. They may seek to look autonomous in the eye of the public, but their apron strings are inevitably carefully tied to the states, so that they are not over-burdened by responsibilities that they can hardly cope with. For example, hospitals will not function effectively if left in hands of local councils alone. And, so would schools, especially primary and secondary schools which are cardinal foundations of our educational system.

“Like millions of uninformed critics who cast aspersions on governors regarding Local Government autonomy and such other expectations, there are many more unaccountable agencies like the NFIU that are surreptitiously creeping into the public space to seek to breach the constitution of the Federal republic. They must seek to know more or cease to weigh-in where they are uninitiated. Democracy is anchored on the rule of law. The governors’ handling of Local Government Funds is a constitutional provision and anyone who does anything otherwise would be breaching the constitution. Instead NFIU and others like it should stick to their mandate of investigating monies laundered for the purposes of terrorism and other nefarious activity or seek to amend the constitution to keep states out of the JAC.”

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