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Unending wait for financial autonomy for local council

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…As Governors Circumvent NFIU’s Directive

Last year, the Nigerian Financial Intelligence Unit (NFIU) stirred the hornet’s nest when it issued guidelines that barred governors from interfering with statutory allocation accruing to local councils from the Federation Account. The guidelines titled ‘NFIU enforcement and guidelines to reduce crime vulnerabilities created by cash withdrawal from Local Government funds throughout Nigeria’, took effect on June 1, 2019.

The NFIU directive was aimed at enthroning financial transparency at the local council level and freeing funds for development at the grassroots. It imposed a daily N500,000 cash transaction limit on all the 774 local councils in the country. It also barred banks, financial institutions, public officers and other stakeholders from tampering with local council statutory allocations.

The governors saw the guidelines as an affront and vehemently kicked against it. Acting under the aegis of the Nigeria Governors Forum, the governors had at the peak of the controversy that the guidelines aroused approached President Muhammadu Buhari to complain that the NFIU acted beyond its mandate. In a letter to President Buhari dated May 15, 2019, the NGF argued that the NFIU Act 2018 did not give the body the powers that it tried to exercise in the guidelines, adding that the unit was acting in excess of its powers and in doing so, showed complete disregard for the constitution.

The governors further argued that local councils were not financial institutions but creations of the constitution. They added that the councils are not reporting entities and therefore not under the NFIU in the manner contemplated by its so-called guidelines.

“In principle, the NFIU should concentrate on its core mandate of anti-money laundering activities and combating financing terrorism as prescribed in the Act establishing it. It should desist from encroaching on or even breaching constitutional provisions. The NFIU is the Nigerian arm of the Global Financial Intelligence Units. It was once domiciled within the EFCC, but now, for the purpose of institutional location, it is domiciled in the Central Bank of Nigeria. The NFIU should comply with those standards on combating money laundering and financing of terrorism and its proliferation as stipulated and not dabble into matters that are both constitutional and beyond NFIU purview,” the NGF said.

Nevertheless, as the governors kicked against the directive, so did many Nigerians and groups, including the Trade Union Congress (TUC) and the National Union of Local Government Employees (NULGE), support the NFIU. Individuals and groups that backed the NFIU said the guidelines would help curb reckless spending of local council funds.

A Law lecturer at the University of Lagos (UNILAG), Wahab Shittu, who spoke with The Nation newspaper then, said the true test of federalism is reflected in fiscal federalism and devolution of powers to the federating units in the federation.

Shittu, who described the NFIU directive as “cheering news”, added: “Hitherto Local Governments were emasculated as they grapple with peanuts with resultant negative development indicators. This narrative is now likely to change with prospects of development brighter. It will translate into greater accountability and transparency in the management of local funds. We now know who to hold responsible for mismanagement of local government funds.

“It will also trigger increased tempo of activities at the local government level with the best hands attracted to come on board. Grassroots development will be enhanced as more funds become available for critical infrastructures and other services. Indeed a new era is born.”

Nine months into the implementation of the NFIU guidelines, feelers from across the country showed that nothing much has changed in the management of local council allocations. While some states claim total compliance with the directive, others claim partial compliance but the council workers and residents sing a different tune. The following stories from some states of the federation exposes the sharp practices going on in some states in their bid to evade being sanctioned by the NFIU in case of a breach of the guidelines.

Confusion Over LG Financial Autonomy In Ekiti
From Ayodele Afolabi, Ado Ekiti
There is confusion as to whether or not the16 local governments in Ekiti State have been enjoying appreciable degree of financial autonomy in line with the NFIU new guidelines.

Whereas senior workers in the local governments who spoke with The Guardian on the condition of anonymity for fear of being victimised said that nothing has changed since the NFIU guideline+ was released, council chairmen on the other hand said they now have control over their allocations.

According to them, though the local governments get their accounts credited, there was still the Joint Account Allocation Committee (JAAC) monthly meeting where the money was redistributed to fund joint projects and other sundry matters by the state government.

A resident of Ado local government in the state capital, Mr Gbenga Ibitoye, observed that as the tier of government closer to the grassroots, the local governments were supposed to assist in the maintenance of roads linking communities but said residents contribute to maintain roads, culverts and drainage channels despite the claim by the council chairmen that they now have appreciable control of their allocations. To him, the local governments have become shadows of themselves.

Another resident, Mr Ojo Sunday, said that until the autonomy of local governments was granted through the amendment of relevant sections of the constitution, the NFIU guidelines couldn’t guarantee the independence of the third tier. “As far as I am concerned, it is still business as usual; nothing has changed,” he said.

The chairman of the state chapter of the Association of Local Governments of Nigeria (ALGON), Mr Akolade Amiri, who also doubles as chairman of Ekiti South West Local Government Area, however asserted that the new autonomy has brought positive impact on the functions of the third tier of government in the state.

Amiri clarified that the monthly JAAC meetings were not convened to receive instructions from state government on how members would deploy their resources as was the case in the past, but mainly to associate and do peer review.

Another council chairman, who craved anonymity, said the councils still operated a joint account with the state, but revealed that they had separate accounts where the monthly allocations were being remitted.

He explained that he spends the allocations to his council on payment workers’ salaries and maintenance of the council’s facilitie, among other things.

The Chairman, Nigeria Union of Local Governments (NULGE), Comrade Bunmi Ajimoko, said granting full financial autonomy to the third tier of government would enhance rapid development at the grassroots level.He said the union was fully in support of financial autonomy to the councils, noting that it would also make them to deliver more on welfare of the workers.

A legal practitioner, Mr Femi Olajide, said the issue of financial autonomy to local governments couldn’t be achieved by administrative fiat as the NFIU was trying to do. He urged the National Assembly to amend the relevant laws so the NFIU guidelines would have legal backing. Olajide lauded the Federal Government for its good intention but stressed that there must be constitutional backing to make it work.

Funds Received By Rivers LGs At Variance With Level Of Development, Say Residents
From Ann Godwin, Port Harcourt
The issue of financial autonomy for local councils is still shrouded in secrecy in Rivers State. It is not very clear if the local government chairmen are truly in charge of their funds as none of them was bold enough to disclose the true state of things.

Some experts and political analysts blamed the situation on the way the local government chairmen emerged, alleging that most of them were handpicked and were as a result very submissive to the state governor.

The stakeholders argued that the chairmen were not delivering quality service to the people because they are not completely independent and also not thoroughly monitored.

However, the Chairman of Khana Local Government Area, Mr. Loolo Lahteh, who spoke with The Guardian, said the council chairmen in the state had access to funds meant for their local councils even before the NFIU guidelines that barred the state government and financial institutions from tampering with their statutory allocations were released last year.

According to Lahteh, “in Rivers State, we have always had access to funds and we have been delivering on our duties, carrying out projects that impact the lives of our people.”

However, findings by The Guardian revealed that the funds received were not commensurate with the level of developments in some areas and when questions were raised, the councillors were bullied.

For instance, in Opopo Nkoro, Ogba/Egbema/Ndoni LGAs and the four LGAs in Ogoniland comprising Khana, Gokana, Eleme and Tai, residents lack potable water.

In Ikwere local government, three councillors were suspended for allegedly asking why the local government chairman, Samuel Wanosike, would embark on a project without passing through the legislative arm for approval of funds and others.

It was gathered that the Akuku-Toru local government chairman, Rowland Sekibo, was carrying out empowerment projects like women empowerment, payment of schools fees and currently building a mini stadium for the people as well payment of electricity bills. Many residents told The Guardian that they were not convinced that those things were the basic needs of the people.  

Speaking on the financial autonomy for local councils, a senior lecturer in the Department of Sociology, University of Port Harcourt and public affairs analyst, Dr. Sofiri Peterside, said it would be difficult to achieve as long as council chairmen see state governors as their godfathers.

He said: “Honestly, I won’t say that the performance of the local government chairmen is better even after that directive and the Supreme Court judgment in Oyo. What we have seen is that chairmen of local councils in Rivers State came up on air and said that the governor was doing well and that there was nothing wrong for the governor to be giving them directives.

“It is amazing that the administrators of the third tier of government that has distinct level of autonomy will say so. What we see is that state government collects the funds meant for the local government to deliver service to the people and distributes at its whips and caprices.

“The local council chairmen see the state governors as their godfathers, as the person who made it possible for them to be in the position, forgetting that this would have provided them the opportunity to key into seeing that the autonomy of the local government areas is preserved and that funds allocated directly to them would be used to provide quality services to the people.”

Sekibo added: “Where I come from in Opobo Nkoro LGA, there is no potable water and we are just by the Atlantic Ocean; there is no quality health care on ground. I suspect that that will be the situation in most local government areas in our country.”

The don however charged civil society organisations to rise up and play their roles by increasing advocacy to enlighten the people and make them know that they have the right to vote the people of their choice in order to get them deliver quality projects and not those who will be handpicked by the governor.

“The people should know that it is no longer the time where state government will wake up and appoint caretaker committee chairmen. So, the community people should now know that things have changed. As opinion leaders, I think we have been trying to ensure that this information is brought to the grassroots so that people will know that the chairmen are not lords. We have the right to elect them and also the right to send them packing if they are not doing well,” Peterside stated.

Also speaking, the Chancellor of International Society for Social Justice and Human Rights, (ISSJHR), Omenazu Jackson, said most people at the grassroots were very docile and so do not ask questions on how their funds were being utilised.

He said: “This is where the problem is coming from and people are not also ready to monitor if the state government is tampering with the funds. And because of the way the local government chairmen emerged, they are still very loyal to the chief executive of the state.

“The people at the local government level have a duty to monitor how much was released and what the chairmen did with it. Most times, when they call me for meetings in my council, Obio/Akpor LGA, I go there and express myself; I raise red flags. Knowing how much my local government realises, I ask how the resources were being deplored. In Obio/Akpor LGA, the funds received are not commensurate with the level of development in the area.

“If people are not monitored and questions are not asked, the chairmen will do what they like and go away with it. The councilors should brief the people every month on what is going on in the council. The one that is not clear, they should find out from the council chairmen. If money is received and nothing is shown for it, the council chairmen should be queried. That is the only way to get them on their toes.”

Omenazu encouraged Nigerians who get bullied when they ask questions on the usage of local government funds not to be deterred but to continue until the right things are done. 

Plateau LGs Get Only About 30% Of Their Allocations
From Isa Abdulsalami Ahovi, Jos
The Plateau State government under the current administration has conducted local government elections in 13 local councils while four local councils remain under the management of caretaker committees.

When The Guardian visited Jos North local government secretariat, a member of staff there who pleaded anonymity said only about 30 per cent of federal allocations get to the council.

He said: “Allocations come as and when due, but barely 30 per cent of it or zero allocation reach the local government. The rest 70 per cent is deducted from source by the state government, leaving the local government with no overhead and funds for development

“That is why township and rural roads, health care clinics and other infrastructures in the council are in a states of decay. Salaries of council staff are paid through a platform set up by the state government,” he said.

Speaking on the need for full financial autonomy for local governments, a retired state public servant, Mr. Daniel Azi Lungs, said the easiest way to achieve that and ensure that they function effectively was through devolution of powers and decentralisation of local government administration.

Lungs said the constitution should be amended such that allocations would be sent to the local governments directly. “Approval to spend such funds should go through the local government legislative arm. This means that any local government that does not have an elected representative should not be funded until election is conducted,” he said.

He said that projects to be sited in a local government should be initiated by the chairman, who is the chief executive of the local government, and approved by the legislative arm of the council before funds are released for the projects.

“It is not for the state to initiate projects through the ministry of local government and chieftaincy affairs,” he said, adding: “The state should play only supervisory role in the execution of local government projects and not deducting directly from allocations to councils.”

Lungs argued that the Independent National Electoral Commission (INEC) and not the State Independent Electoral Commission should conduct local government elections. “By so doing, this will give room for free, fair and credible elections at the grassroots.

“Attainment of DPMs, DFSs should be through career progression at the local government. The office of the local government and chieftaincy affairs, local government service commission and SUBEB should be devolved to the office of the chief executive of the local government. The joint local government and state account office should be scrapped so that federal allocations are sent directly to the councils to give them financial autonomy,” he added. 

We Don’t Tamper With LG Allocations, Says Kebbi Commissioner
From Ahmadu Baba Idris, Birnin Kebbi
Following the May 2019 directive by the NFIU, which rolled out new guidelines for the management of local council allocation, local councils in Kebbi State have been receiving and expending their funds as directed by the agency.

The Commissioner for Local Government and Chieftaincy Affairs, Mohammed Shala, said that even before the NFIU directive, the state government had been receiving their allocations directly and using them for the development of the grassroots.He explained that the local government education authority, Emirates Council and other parastatals now receive their money through their respective local government areas.

“We only facilitate the payment to the local government councils but now they are the ones that disburse the payments,” he added.A staff of one of the local councils, Hassan Idris, confirmed the Commissioner’s assertion, saying they now receive their allocations and disburse accordingly. Idris commended the state government for the heeding the NFIU directive.

Ebonyi Claims Total Compliance With NFIU Guidelines
By Nnamdi Akpa, Abakaliki
There is total compliance with the NFIU directives and guidelines on financial autonomy for local governments in Ebonyi State.

The Guardian gathered that the financial autonomy has enhanced governance in all the 13 local government areas of the state with developmental projects springing up in the localities. The local councils have been executing joint projects with the state government in the areas of road construction, health care delivery and markets development, among others.

It was also observed that the development has been restoring people’s hope in local government administration. Speaking with The Guardian, the Chairman of Afikpo South LGA, Eni Uduma, said that all the LGAs in the state were complying with the directives of the NFIU, noting that all the chairmen were living up to expectation.

He noted that the LGAs were paying their UBEB counterparts fund and others statutory deductions, adding that every staff of the local councils receive his/her salaries before the 20th of every month in line with state government’s policy of prompt payment of workers’ salaries.

According to him, the local councils have been executing projects, explaining however that they execute capital-intensive projects in partnership with the state government.

Uduma thanked Governor David Umahi for providing the enabling environment for local councils in the state to function properly, emphasising that the state government does not tamper with local government funds.

A senior staff with one of the local councils, who pleaded anonymity, lauded the Federal Government for the financial autonomy, adding that total autonomy should be granted to the local councils for effective administration at the grassroots.He argued that since the local government areas are very close to the grassroots, granting them full autonomy would enhance rural development.

“Many projects both completed and ongoing are springing up in all the local government areas in the state due to financial autonomy. What will happen if full autonomy is granted? There will be more infrastructural development in the hinterland,” he noted.

No Impact Of Local Councils Yet In Oyo
From Rotimi Agboluaje, Ibadan
Following the sacking of the chairmen 33 local government areas and 38 local government development areas by the Seyi Makinde-led administration on May 29, 2019, local council administration in Oyo State has literarily been on standstill.

The governor appointed Caretaker Committee in place of elected chairmen and councilors but governance at the local level is yet to take a defined shape. Many people who spoke with The Guardian said the impact of the local councils under the present administration was yet to be felt.

However, the caretaker committee chairman of Ibadan North West Local Government Area, Rahman Olanrewaju Adepoju, told The Guardian that for local councils to function properly, they must be run in compliance with the constitution.  “The local government areas in Nigeria are not being run as the constitution spelt it. So, I think we should make use of our constitution to direct the affairs of local government as it supposed to be,” he said.

Speaking on how the performance of the local councils could be enhanced, Prof. Bayo Okunde of Department Political Science, University of Ibadan, Ibadan, said: “We only needed the political will to enhance the performance of local government in Nigeria. Let me be blunt; we have not yet such a system in place but a caricature of local government system. We first of all have such a system possibly approximating the letter and spirit of 1976 reform. A system that is imbued with trapping of government at the local level, which is elected, have power to make authoritative and binding decisions at the closest local level, have capacity to raise and control its funds including its budget, defined functions, power to recruit and control requisite staff and free from non-constitutional hindrances from federal and state government. Local councils should be free to the extent that state governments are free from the Federal Government. 

“It is when all or most of these are in place that we can herald in a local system and then have a true reflection of local government in the country. Hitherto we have been assessing an administrative system other than local government.”

Imo Yet To Grant Local Councils Financial Autonomy
From Charles Ogugbuaja, Owerri
At the moment, the Imo State Government is yet to grant financial autonomy to the local councils as directed by the Nigeria Financial Intelligence Unit (NFIU). There are 27 local councils in the state.

The last local council election in the state was conducted in 2018 under the administration of former governor Rochas Okorocha. The elected chairmen and councillors were however suspended by Okorocha’s successor, Chief Emeka Ihedioha, who was sacked by the Supreme Court after seven months and two weeks in office. The administration, with the approval of the state House of Assembly, appointed Interim Management Committees (IMC) to administer the councils. They operated for six months at the first instance and later had their tenure extended for another six months by Ihedioha.

Sources said the councils collectively receive about N3 billion monthly from federal allocations. Ihedioha, according to sources, allegedly controlled the finances of the local councils even though they claimed they enjoyed financial autonomy. During the Ihedioha administration, the IMC officials were instructed to build a stadium at the headquarters of the 27 local councils.

But Ihedioha’s successor, Senator Hope Uzodinma, has sacked the 27 IMC officials, directing them to handover all the affairs of the councils to the Directors of Administration and General Services of each of the councils. There is no timetable yet for the conduct local council election in Imo State, meaning that the Uzodinma administration would continue to control the affairs of the councils for the time being.

Meanwhile, the Imo state executive of the National Union of Local Government Employees (NULGE) led by the President, Richard Eze, visited the Deputy Governor of the state, Prof. Placid Njoku, and urged the administration to look into the issue of autonomy and other needs of the councils.

Eze said: “Your first leg of upholding the autonomous status of local governments and the follow-up appointment of Directors of Administration and General Services to take charge of the local governments pending the conduct of local government elections as well as prompt and full payment of staff salaries and pensions is a clear manifestation of your desire to return the local government and its administration to its past glory.”
Njoku, in his response, pledged to convey their message to the governor.


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