•To begin direct allocations to 774 LGAs June 1
•Defaulting banks‘ll be sanctioned
•Limits daily cash withdrawal from LGA accounts to N500,000
•Any transaction above N500,000 must go via cheques, e-transfer
•NGF keeps mum
By Soni Daniel, Northern Region Editor & Henry Umoru
ABUJA – THE Federal Government, yesterday, drew the battle line with state governments over financial autonomy for local councils.
From left: Yobe State Governor, Ibrahim Gaidam;
Minister of National Planning, Udoma Udo
Udoma; Zamfara State Governor also the
Chairman of the Governors Forum, Abdulaziz Yari
and Vice President Yemi Osinbajo during the
National Economic Council meeting held at the
Presidential Villa Abuja. Photo by Abayomi ADESHIDA
Alarmed by the continuous misuse of money allocated to local councils across the nation over by state governments through the State Joint Local Government Accounts, SJLGA, the federal government banned the intruding of states council allocations distributions by means of the recently initiated Financial Intelligence Unit, NFIU, which was extracted from the Economic and Financial Crimes Commission, EFCC, as of recent.
The government set June 1, 2019, as the take-off date for the new request, making it obligatory for all LGA allocations to go directly to their respective bank accounts.
Be that as it may, the Federal Government’s move has a lawful obstacle to surmount as Section 162 (8) of the 1999 Constitution (as amended) empowers the states to distribute allocation to councils “among the Local Government Councils of that State on such terms and in such way as might be endorsed by the House of Assembly of the State.”
The decisions to prevent local government allocations from going to state accounts are contained in the guidelines released yesterday by the NFIU after an extensive meeting with officials of commercial banks in Abuja.
The guidelines would make the joint account system currently in use only exist for the receipt of allocations from the l federation account yet not for dispensing.
This comes less than a year after President Muhammadu Buhari signed the NFIU bill into law, accordingly separating the agency from the EFCC.
The notice entitled, “Guidelines To Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria, Effective 1st June, 2019,” is said to have been prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.
The NFIU warned banks to comply with immediate effect, threatening to sanction any bank that flouts the order.
The agency stated: “The NFIU demands every single financial institution, other relevant stakeholders, public servants, and the entire citizenry to financial institutions and relevant enforcement agencies, of the rules previously submitted to financial institutions and significant enforcement agencies, including full implementation of comparing sanctions against infringement from June 1, 2019.
“Having acknowledged through examination that money withdrawal and transactions of the State, Joint Local Government Accounts (SJLGA), presents the biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the nation in general, the NFIU chose to maintain the full arrangements of Section 162 (6) (8)of the 1999 Nigerian Constitution as amended, which assigned ” State Joint Local Government Account into which will be paid allocations to the local government councils of the state from the federation account and from the government of the state.
“The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state” and not for other purposes.