Senate Slams Govs over LG Funds, Supports Council Autonomy

The Senate Wednesday adopted a motion asking relevant stakeholders including state Houses of Assembly and the presidency to expedite action on financial autonomy for all the 774 Local Government Councils in the country, frowning on alleged mismanagement of state/local government joint accounts by state governors.

This was sequel to the adoption of a motion moved by Senator Sabi Abdullahi (Niger North), over the new financial guidelines issued by Nigerian Financial Intelligence Unit (NFIU) on Monday.

Abdullahi in the motion tagged: “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June,” said issuance of the new guidelines was prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.

According to him, the NFIU guidelines would reinforce the existence of local government as an independent government established by the Constitution at the grassroots level with sovereign and elected officials.

Supporting the moves by NFIU, the Senate said the guidelines limit cash transactions in the accounts of local governments to a daily maximum of N500,000 and subsequent withdrawal must be approved by approved cheques or electronic payment channels to promote registered transactions by all the local governments.

It called on the 36 state governments and the FCT, to fully support the implementation of the new NFIU guidelines to promote good governance at the local government areas and restore governance at the grassroots levels.

Contributing to the debate on the motion, Deputy Senate President and Chairman of Senate Committee on Constitution Review, Senator Ike Ekweremadu, urged the Senate to liaise with the NFIU to ensure that the guidelines do not contradict with any part of the Constitution.

He appealed to state assemblies to fast-track their work on pending constitutional amendments which would give legal backing to local government autonomy.

Ekweremadu however cautioned that the position of the Senate that financial institutions should support the implementation of the new guidelines, contravenes Section 162(6&7) of the 1999 Constitution as amended.

Section 162(6&7) states that “Each State shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the local government councils of the state from the Federation Account and from the Government of the State; “Each State shall pay to local government councils in its area of jurisdiction such proportion of its total revenue on such terms and in such manner as may be prescribed by the National Assembly”, he said .

Ekweremadu warned that if any section of the constitution is flouted, governors may challenge the move in court. He said the best option was to amend the various sections of the constitution to grant full autonomy to local governments.

“The Senate further agrees that the NFlU guidelines do not serve any purpose other than freeing the Financial System from being flooded with cash which criminals use to escape transparency, accountability, and criminal investigation,” he said.

But former Plateau State Governor, Senator Jonah Jang (Plateau North), faulted the motion saying “In some states, the state government takes over the local government funds and abuse it. We have also witnessed local government chairmen signing cheques at the beer parlours.

On his part, Deputy Leader of the Senate, Senator Bala Ibn Na’alla, said:“If we succeed in executing this, 60% of corruption in Nigeria will be resolved.This will be a major landmark if the Senate decides to follow through its resolutions,”

“Let all financial institutions agree, and all of us agree that we must follow these guidelines and let the local governments be autonomous”, he further said.

Senate President, Dr. Bukola Saraki, in his contribution urged the standing committees on Anti-Corruption and Financial Crimes; State and Local Governments, to follow up and ensure that positions reached by the Senate are adhered to.

He said the local governments as currently constituted, can’t deliver dividends of democracy to the people as long as state governors are in charge of the funds.

NFIU’s new guidelines mandates financial institutions to distribute funds accruable to local governments among the local government councils of that state and not for other purposes.

“With effect from June 1, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, locally and internationally.

“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000 per day,” the new guidelines stated.