Seeks urgent adoption of LG financial autonomy option

By Henry Umoru

THE Senate, yesterday threw its weight behind financial guidelines for Local Governments recently introduced by the Nigerian Financial Intelligence Unit (NFIU).

NFIU, Senate

The Senate has also resolved that relevant stakeholders like State Houses of Assembly and the Presidency should expedite action on the nagging issue of granting Financial Autonomy to Local Government Councils across the country.

The Upper Chamber has urged all financial institutions to support the implementation of the new guidelines and the federal government to urgently fund the operations of the new NFIU.

The Senate has also asked the 36 State and the Federal Capital Territory, FCT, to fully support the implementation of the new NFIU guidelines while calling on state assemblies to hasten constitutional amendment as regards local government autonomy.

The upper legislative chamber also observed that such a measure would deepen democracy and good governance at the grassroots level.

Resolutions of the Senate yesterday were a sequel to a motion entitled, ” Nigerian Financial Intelligence  Unit, NFIU and Local Government  Finances” sponsored by Senator Aliyu Sabi Abdullahi (APC, Niger North).

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The motion drew the attention of Senate to new financial guidelines released by the Nigerian Financial Intelligence Unit (NFIU) and tagged “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June.”

In his contribution, the Deputy Senate President, Ike Ekweremadu, and chairman of Senate Committee on Constitution Review urged the Senate to liaise with the NFIU to ensure that the guidelines do not contradict with any part of the Constitution.

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

His position was supported by Senator Adamu Aliero (Kebbi-APC), George Akume (Benue-APC) and Deputy Senate Leader, Ibn Na’Allah.

It would be recalled that NFIU had on  Monday issued a guideline which prevents state governments from making withdrawals from local governments’ funds.

The new guideline mandates financial institutions to distribute funds accruable to local governments among the local government councils of that state and not for the other purposes, just as new financial guidelines limit cash transactions in the accounts of local governments to a daily maximum of N500, 000.

The statement had read that, ” 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.”

Presenting the motion, Senator Sabi Abdullahi who noted that the  issuance of the new guidelines was prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse, said that  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.

He said, “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.”

In his contribution, former Plateau State Governor, Senator Jonah Jang, who faulted the motion, said: “In some states, the state government takes over the local government funds and abuse it. We have also witnessed local government chairmen signing checks at the beer parlours.

Also contributing to the debate, Deputy majority leader, Senator Bala Ibn Na’allah, said: “If we succeed in executing this, 60 per cent 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.”

On 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, deputy president of the Senate, Ike Ekweremadu explained that 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.”

Ekweremadu who advised that the position of the Senate must conform with what is permissible in the constitution, however, 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.

Many former governors in the Senate who supported the motion, said that the reforms were overdue and will help free up funds for the development of local governments.

Senate President,  Dr.Bukola Saraki, who presided, 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.

According to him, 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.



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