LG Funds: Court rejects Governors Forum’s move to block implementation of NFIU Guidelines

A Federal High Court in Abuja has rejected the request by the Governors of the 36 states for an order stopping the implementation of guidelines issued by the Nigerian Financial Intelligence Unit (NFIU) in relation to the operation of the States/Local Government Joint Accounts.

The NFIU’s guidelines, which took effect from June 1, 2019, direct banks not to allow transactions in States/Local Government Joint Accounts, but that such accounts should only be used to distribute allocations to accounts of local governments directly.

The guidelines stopped governors from tampering with funds meant for Local Government Areas.

The 36 governors are, in a suit they filed before the court through the Nigeria Governors Forum (NGF), marked: FHC/ABJ/CS/563/19, challenging the legality of the guidelines.
The case could not be heard on Tuesday owing to the absence of the NGF’s lead lawyer,n Lateef Fagbemi (SAN) who was before the Presidential Election Petition Tribunal (PEPT).

When the case was called, the lawyer who appeared for the plaintiff, sought a stand down till 11. 30am for Fagemi to arrive and conduct the plaintiff’s case, a request Justice John Tsoho granted.

When the case was called at 11:48 am and Fagbemi was still not in court, lawyer to NFIU, Arthur Obi-Okafor (SAN) objected to a request for further stand down to await Fagbemi’s arrival.

Obi-Okafor told the court that his team ”had shown good faith by waiting for the plaintiffs counsel till 11:30am and there is no guarantee he will be through at the Court of Appeal if the matter is stood down for another 30 minutes”.

He also equally the court that they are already challenging the jurisdiction of the court to hear the matter which has been served on all the parties.

Plaintiff’s lawyer did not object to an adjournment, but prayed to restrain the NFIU from proceeding with the enforcement of the Guidelines pending the determination of the case, a request Justice Tsoho rejected.

Justice Tsoho, in declining the plaintiff’s request, said since it is a constitutional matter, he will not ”bother with interlocutory injunctions.”

The judge then adjourned till October 23, 2019 for the hearing of all pending applications

The NFIU had, on May 6, 2019 issued the “Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria.” which stopped governors from tampering with funds meant for Local Government Areas.