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Hope rises for LG autonomy with Senate’s support

By John Akubo, Lokoja
15 May 2019   |   3:58 am
The chickens may be coming home to roost for state governors as the Nigerian Financial Intelligence Unit (NFIU) has made moves to tighten the noose on the disbursement and transactions around local government funds. The NFIU, a creation of the National Assembly, became independent after the bill was passed and President Muhammadu Buhari assented to…

Saraki arriving at the Senate/IGP scurity briefing. Photo/twitter/bukolasaraki

The chickens may be coming home to roost for state governors as the Nigerian Financial Intelligence Unit (NFIU) has made moves to tighten the noose on the disbursement and transactions around local government funds.

The NFIU, a creation of the National Assembly, became independent after the bill was passed and President Muhammadu Buhari assented to it.

Nigeria was on the brink of suspension from the Egmont Group, the global body of financial intelligence units, because the NFIU was not autonomous.

Now that the unit has been strengthened, there is hope for the democratization of financial dealings at the grassroots, as the diversion of local government funds had stifled development at that tier of government leading to all the attendant issues of insecurity, poverty and non-existence of local councils.

Instructively, there has been a clamour for the amendment of the Constitution of the Federal Republic of Nigeria so state governments loosen their grip on the local governments’ control and allow councils to provide the much-needed basic services to the people.

The establishment of local government was aimed at providing good governance and accountability at the grassroots, especially as it is the closest tier of government to the people.

Many attempts to amend the constitution had been frustrated by governors who usually usurp the powers of the third tier of government in order to have absolute control of the allocation and resources accruing to them, by hiding under the window of the joint account.

Over the past few years many state governors did not want the constitution to be amended to give autonomy to the local governments.

One of such ways was to ensure local government elections are not held to elect their executives. Rather, governors bypassed the law and imposed on the councils caretaker chairmen.

Ironically, just when some of these governors are out of office and have retired to the senate, they would be the first to join the agitation for autonomy for the local councils they shunned while in office.

This was what played out last Wednesday during plenary at the senate chamber when Senator Aliyu Sabi Abdullahi (Niger North) moved a motion on the Nigerian Financial Intelligence Unit (NFIU) and Local Government Finances. 

Most of the senators were unanimous in urging the 36 state governments and the Federal Capital Territory (FCT) to fully implement the new Nigerian Financial Intelligence Unit’s (NFIU) guidelines for the promotion of good governance at the grassroots level. They also called on all financial institutions to support the implementation of the guidelines of NFIU with diligence and professionalism. The motion was adopted at plenary presided over by Senate President Bukola Saraki.
While moving the motion, Abdullahi explained that the new NFIU guidelines came as a result of the threats by international financial watchdogs to sanction Nigeria for alleged financial abuses. Part of the guidelines, according to the lawmaker which would come into practice by June 1, will limit cash transactions in the accounts of local governments to a maximum withdrawal of N500,000 per day.

”The new guidelines further provided that subsequent withdrawals must be by approved cheques or electronic payment channels to promote registered transactions by all the local governments,” he said.

The legislator, who is also the Senate Spokesman, emphasised that part of the advantages of the NFIU guidelines was to forestall suspicious transactions for terrorism-prone areas. He further said adherence to the guidelines would check vices of terrorism, proliferation of small arms, kidnapping, ethnic violence, cattle rustling and provide credible intelligence for law enforcement and national security.

In their contributions, majority of the lawmakers supported the motion, arguing that local governments across the country should be given full autonomy in order to rescue the third tier of government from being an appendage of the state over their monthly allocations provided by the Federal Government.

The legislators also urged the state assemblies to support the constitutional amendment that would deepen democracy at the local government level.

However, Sen. Jona Jang (Plateau) faulted the intellectual capacity and financial discipline of some local government chairmen, particularly in the north, to manage the monthly allocations effectively. He said most of them were not properly educated and therefore unfit to manage the funds. 

In his ruling, Senate President, Saraki, stated that there was need for the National Assembly to engage state governors to allow local government autonomy. According to him, it is time for the country to try another system where LGAs will be independent of the state governments.

Saraki said, “We all talk about the local government administration which has been an issue of great concern for some of us who have had the opportunity to be governors and later legislators. I think it is clear like everything else that a few bad eggs tend to give the whole system a bad name.

“I think that apart from all this, there must be a kind of interface between the National Assembly and governors to let them understand the need for funding and allowing the local governments to have their autonomy. I think it is important because it is clear that this is affecting the local government administration.”

When the motion was put to a voice vote, it was unanimously adopted by the lawmakers. The Senate therefore urged the Federal Government to urgently fund the operations of NFIU to enable it earn the confidence and trust of Nigerians and its international partners. It also agreed that the NFIU’s guidelines would reinforce the existence of local governments as independent governments established by the constitution at the grassroots level, with sovereignty and elected officials directly from the people for their protection and welfare.
The NFIU’S intervention seems to be coming at the right time as it has tightened the noose on some complicit banks. It is on record that the NFIU had shown widespread abuse of the State Joint Local Government Accounts (SJLGA) by state governors.

FOR instance, a state governor is already on the watchlist for allegedly withdrawing about N10 billion from his state’s Joint Local Government Account (SJLGA) under the guise of addressing security challenges.

Much of the funds were withdrawn in cash on the orders of the governor. The alleged fraud was uncovered by the Nigerian Financial Intelligence Unit (NFIU) following suspicious transactions by the governor.

The banks which facilitated the withdrawals have been assisting security agencies, especially the NFIU, on how the fraud was perpetrated. Ongoing investigation by the NFIU has shown widespread abuse of the State Joint Local Government Accounts (SJLGA) by state governors.

The development was said to have informed the decision of the NFIU to ban banks, governors, other financial institutions, public officers, and relevant stakeholders from tampering with the statutory allocations of local government areas from the federation account.

It was learnt that although new financial guidelines by the NFIU would become effective from June 1, the agency has already put all the banks on notice to forestall last minute withdrawals from the joint accounts by governors.

The NFIU said as from June 1, 2019, 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, both locally and internationally. According to a reliable source, the NFIU has retrieved a table of massive withdrawals by state governors from the joint account.

The source said: “Of all the instances at hand, we have a case of cash withdrawal from a joint account which was as much as N10 billion by a governor. This is a state with all sorts of insecurity. About N10 billion out of the N100 billion was recently withdrawn in suspicious circumstances.

“We have shared the intelligence with all relevant agencies. We cannot allow the trend to continue at all because whatever we are doing has global implications. Some agencies are already handling the case of the said governor. Before the international community comes talking to us, we have decided to act with the issuance of new guidelines.”

Senator Abdullahi, at a press conference after plenary, said he was motivated to sponsor the bill because of his passion and belief that local government is for sustainable development at the grassroots level and key to the existence the country.

According to him, “Contrary to what some people will always want us to believe that local government as the third tier of government should not exist, I disagree. I will continue to submit that we all need the local government if Nigeria must sustainably survive.

“But today the situation we find ourselves is such that the third tier is non-existent but only on paper and they are only being used to cart away funds anyhow they want and at the end of the day you go to the local government area there is no activity. 

“So when the Nigerian Financial Intelligence Unit came up with this guideline which is aimed at providing the framework for managing cash in the local governments I was excited. I felt this is something that should not be buried.”