Friction in local governments over fiscal autonomy, accountability

By Leo Sobechi (Lagos) Kelvin Ebiri (Port Harcourt) and Abel Abegonye (Lafia) |   14 August 2019   |   3:05 am  

President Buhari flanked by Vice President, Prof. Yemi Osinbajo and other aides as he signs the bill on LG autonomy.


Barely one month after he was inaugurated for a second term in office and days to the inauguration of the 9th session of the National Assembly, President Muhammadu Buhari, gave assent to a bill that allows states’ judiciary to directly access funds to their credit, and no longer through the state governors.

Prior to that auspicious development, Buhari had also, at the tail end of his first term, granted similar fiscal autonomy to local government councils, thereby freeing the third tier of government from the apron strings of powerful state governors.

Expectedly, the new lease of life granted to the various arms and layers of government threw up mixed reactions from stakeholders. For quite some time now, the intricate mix of fiscal management in local government councils have been at the root of unending arguments between stakeholders in both local and state governments.

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For instance, no sooner had President Buhari put pen to paper acceding to the fiscal freedom for local governments than a group known as Akwa Ibom Liberation Movement (AILM) issued strong reservations about the efficacy of the policy statement.

AILM specifically said the Local Government Autonomy Bill signed into law by the President does not seem to be “in the best interest of Akwa Ibom State and its people.”

In a statement signed by its leader, Prince Emmanuel Sam, AILM described the law as idealistic and programmed to fail, contending that while it appears ideal to grant financial and administrative autonomy, “the reality on ground makes its implementation near impossible.”

Sam further lamented that the new law presents a new set of challenges in local government administration, saying that it must be resolved in order not to bring chaos, conflict and insecurity in Akwa Ibom State, even as he argued that “there was no thorough assessment of the economic impact the development will have on states.”

AILM accused the Federal Government of double standards, noting that while Buhari was in a hurry to sign Local Government Autonomy Bill into law, he was reluctant “to address a fundamental matter such as federalism that affects the very existence of the country.”

The group also expressed fears about possible job losses at the LGAs as fallout of the new development, stressing that the same way one state cannot transfer its workers to other states, local governments will not accept indigenes of other local governments. But while AILM was full of lamentations, Speaker of Taraba State House of Assembly, Mr. Abel Diah, was full of praises for the new law, maintaining that granting local government autonomy “would lead to dynamic and active parliamentary democracy, (which is) the fulcrum for the attainment of dividends of democracy to Nigerians.”

Diah further stated: “We should prepare ourselves to face the challenges that will come our way and bring progress and prosperity for nation-building. With this law, democracy is gaining ground and heading towards success.”

NFIU angle, implementation hiccups
THE Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, explained in an interview that the Nigeria Financial Intelligence Unit (NFIU) law empowers the unit to monitor withdrawals, movements of funds, and everything that deals with finances as it affects the country.

He said the government ought to be interested in how funds are used, noting that funds have become instrument of destabilization in most countries, adding, “So, it is important that as Nigerians we to follow up and keep in mind how funds are moved within the system. It can destabilize the economy and the security architecture of the nation, so we have to be very careful.”

It is also the thinking in government quarters that for a long time state governors rendered local government funds as sources of easy money for political mobilization and other excesses. But, while local governments are basking under the euphoria of the recent fiscal autonomy granted it by the new law, there are no indications that the policy will usher in a new era of rural development in the states.

In Rivers State, for example, Governor Nyesom Wike, who was a two-term chairman of Obio-Akpor Local Government Area, lamented that despite huge allocations to the 23 councils, none of them could boast of capital projects. Indeed since 1999, Rivers State has remained averse to granting local government autonomy, as it is believed that that could lead to instability of governance at the grassroots.

The 8th State Assembly, which voted overwhelmingly against autonomy for councils, had argued that granting financial autonomy to councils might usher in again the era of zero allocation, where councils could barely pay workers’ salaries. The Guardian checks revealed, for instance, that monthly allocation for June from the federation account was paid directly to the accounts of the 23 local government areas of the state. Chairmen of both Eleme and Khana local government areas, Philip Okparaji and Loolo Lahteh, confirmed the fact.

However, the state and local government councils are yet to work out modalities on how payment of salaries of primary school teachers, primary healthcare workers, local government pensioners and traditional rulers would be made. This reality seems to echo the concerns raised by AILM.It would be recalled that in 2007, the administration of former governor Chibuike Amaechi, had taken over the responsibility of paying the salaries of primary school teachers and health workers from the council, all in a bid to ensure that there is stability in the polity.

Yet, the National Union of Teachers (NUT) remains vehemently opposed to financial autonomy for the councils as it seems comfortable with the current arrangement whereby the state government deducts primary school teachers’ and primary healthcare workers’ salaries at source. The state was paying over N2 billion as salaries to teachers and health workers during Amaechi’s era, because prior to that time, council chairmen were lamenting about zero allocation.

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Eleme council chairman, Okparaji told The Guardian that although the councils were excited about the new fiscal policy, it has created some challenges for local governments in the state. Okparaji said: “We started receiving direct from the federation account this month for the month of June. Allocation meant for the local government was paid directly into the account of the local government. We are happy, but let me say there are certain challenges. You will find that primary school teachers, primary healthcare and pensioners’ salaries need to be paid. These are issues we need to resolve amicably with the state government so that they can get their money on time.

“Under Amaechi’s government, there was a law that as allocation comes in you withdraw at source to pay the teachers, primary healthcare workers and traditional rulers. But now we are getting the whole money. So we need to pay the traditional rulers; we need to pay primary school teachers; we need to pay the primary healthcare workers. We need to pay the pensioners and that is why we are still working out modalities for them to get their money early.

“We need to work out modalities to confront these challenges so that the traditional rulers can get their own five per cent and pensioners can get their money on time, because now local governments go to bank and withdraw only N500,000.00 per day. We don’t want traditional rulers to go through some cumbersome process to get their money.”

A source, however, informed The Guardian that for now, local government chairmen don’t know the total emolument of the teachers and healthcare workers because the state government had been saddled with that responsibility since 2007. But Okparaji said his main preoccupation was to see the speedy resolution of the issue of payment due to primary school teachers and healthcare workers.

“There could be some local government chairmen who could be overzealous and say they won’t pay,” he said. “We don’t want people to suffer in the process, and that is why the state came in to mitigate the suffering of these people. Now the allocation is coming to us and we believe that we will work out a modality where these people will take their salaries or payment.”On his part, Khana Local Government chairman, Lahteh said he was not really enthused by the new policy because it does not in any way enhance the financial fortunes of the council.

According to him, “We are not bothered about it, because the allocation we get through the Joint State and Local Government Account was the same allocation whether they come in directly or indirectly. There is nothing special about it. Whether it comes directly or indirectly, it is the same amount that comes to the local government. Those who are excited are those who don’t know how the system works. Here in Rivers State we get our money complete from the State-Local Government Joint Allocation Account Committee.”

Not minding whether councils get their allocations directly or not, there is no way of holding council officials accountable for their actions.  For years, basic information about public expenditure at the local level has been kept as a closely guarded secret. Some past local government chairmen, who pleaded anonymity, lamented that one of the problems that has bedeviled the councils has been the incidence of too many deductions, such that after paying salaries they are left with nothing for capital projects.

Perhaps as a warning to council chairmen not to be carried away by the new policy of direct allocation, Rivers State Government, which oversights the council, has set up a committee headed by the Deputy Governor, Mrs. Ipalibo Banigo, to investigate financial transactions of the councils. Banigo said the committee to audit and investigate the 23 local government councils was set up to reposition the third tier of government as a bastion of grassroots development. She stated: “The purpose of the exercise is not to witch-hunt anybody, but to re-position the local government councils as a bastion of grassroots development and democratic dividends. The local government is the closest tier of government to the people. Governor Wike wants to be sure that monies that get to the councils are used in the overall interest of the people.”

Similarly, while inaugurating a committee to look into the accounts of local councils and development areas in Oyo State, Governor Seyi Makinde, said his administration was committed to delivering the dividends of democracy, noting that the initiative was not to go after the immediate past administration, but to set the stage for proper take off of “our government.” Makinde said looking into the accounts of local government “is highly needed at this point when there is a paucity of funds and the need to re-strategise and define to means to fund activities of government.

“In fact, I must state that the committee we are inaugurating today is in pursuant to the Public Property and Funds (Investigation and Recovery) Panel Law, Cap 138,Vol.4 of Oyo State Law, 2,000.“Section 3 of the law states, thus, “Whenever it shall appear to the Government of the State that any person or body of persons in the custody of any property belonging to the government or any company in which the State Government has any interest however arising or is accountable to the government for any contract entered into or purported to have been entered into between him and the government or monies which he may have collected on behalf of or for the purposes of the government, the Governor may set up a panel to investigate  or ascertain the identity and extent of such  properties or fund and make order for recovery of such property or fund.”

The governor conceded that the local government “is the governments at the grassroots level are the closest to the people,” stressing that it is therefore important to take into consideration all matters that affect the people.

Development areas as blind spots
IN Nasarawa State, owing to the new impetus, some local government councils are kicking against the practice of sharing funds with the development areas created. The move is believed to be in strict compliance with the Federal Government’s directive on local government financial guidelines. The reasons put forward by the local government councils are that the development areas are not captured by the 1999 constitution and that the Federal Government allocates funds to respective local governments.

Meanwhile, the state government has complied with the new Local Government’s Financial Guidelines as directed by Nigerian Financial Intelligence Unit (NFIU). The Permanent Secretary in the Ministry of Local Government and Chieftaincy Affairs, Bala Sani, who disclosed this during the state’s LG Joint Account Committee (JACC) meeting, said the state government has fully complied with the directive in order to ensure prudence and accountability in the management of resources.He said the guidelines were put in operation since June 1, adding that the government has also set up the machinery to ensure its success, even as he disclosed that the JACC meeting still holds because money was not sent directly to LGAs account, but through the local governments joint account. Sani also remarked that Nasarawa State has development areas that are not recognised by the new guidelines and urged LG chairmen to share the allocation with the respective development areas.

He urged them to ensure that statutory deductions were considered on first line charges before any other expenses were made. He listed the statutory deductions to include salaries for traditional rulers, percentage for pension of retirees, money for training of staff at Local Government Service Commission. Others, he said, are salaries for primary school teachers to State Universal Basic Education Board (SUBEB), Primary Healthcare and Development Agency (PHCDA), among others.

The state’s Accountant-General, Zakka Yakubu, advised that LGAs should share the allocations with the development areas the way it was done in the past, noting, however, that the guidelines do not recognise development areas. He explained that the state’s law created the development areas from the local governments for administrative convenience, contending therefore that the development areas remain parts of the local governments.

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Yakubu charged council chairmen to keep proper records of their expenditures to avoid violation of the guidelines.But in Bauchi State, the caretaker committee chairmen of the 20 local government areas are in search of legal redress as to why Governor Bala Mohammed disengaged them before the expiration of their tenure. A former caretaker chairman of Bauchi local government area, Alhaji Chindo Abdu, who spoke on behalf of the others, claimed that they were appointed by former Governor Mohammad Abubakar to serve for a period of nine months, insisting that their tenure ought to end by September this year. He recalled how Mohammed, issued a statement directing all political appointees to vacate their offices without cognisance of the law that appointed them immediately after taking over.

Although Chindo could not say whether the development followed the presidential directive on direct funding, he lamented that a letter written to the governor, through the Secretary to the State Government, reminding him of the duration of their tenure did not yield fruit.

While accusing the governor of withholding their salaries and allowances, the former caretaker chairman said: “Based on the appointment letters we have, we are to stay there for nine months. And those nine months will expire in September. This month has ended; there is no salary and entitlements, which we deserve. Base on that, we approached Bauchi State High Court to demand for our rights.”

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