The guidelines recently released by the Nigeria Financial Intelligence Unit (NFIU), which aim to monitor the operations of the state/local government joint account, are coming 20 years late. Had they been in place at the inception of the Fourth Republic, perhaps Nigeria’s 774 local governments would have truly become the engines of grassroots development across the country, a far cry from what they have been since then.

The suffocation of local governments resulting in the lack of development at the grass roots has been attributed to lack of financial autonomy, corruption and undue interference. The joint state/local government account has given state governors an opportunity to steal LG funds. And it is the reason most of them would not allow any reform aimed at recognising the local government as a distinct tier of government.

Indeed, the LG as the third tier of government in Nigeria has been a myth, since the constitutional powers to establish it, define its structure, composition and functions belong to the state governments. Apparently, many state governors have latched onto these lacunae to starve the local governments of the funds allocated to them. Had section 162 of the constitution been amended to provide for direct payment to the local governments from the federation account since 1999, the current NFIU guidelines would have been unnecessary. Yet, several editorials and opinion articles drawing attention to the gaps in this fraudulent 1999 Constitution have been ignored by those who are supposed to be representatives of the people. Those who say that Nigeria has been governed by bandits are not far off the mark.

We are, therefore, not surprised that the Nigerian Governors’ Forum, this week, issued a statement condemning the NFIU’s move.  The 36 state governors are, of course, uncomfortable with the decision to monitor the operations of the controversial state/local government joint account. What makes the move “illegal”, according to them, is that same section 162 of the constitution imposed on the country in 1999, not the need for transparency and accountability in the running of government affairs. In the Governors’ Forum’s statement signed by its chairman Abudulaziz Yari of Zamfara State, it states that “nothing in the NFIU Act 2018 gives the body the powers that it seeks to exercise in the guidelines that it released and is, therefore, acting in excess of its powers and by so doing exhibits complete disregard of the constitution of Nigeria.” The NGF accused the NFIU of “stoking mischief and also deliberately seeking to cause disaffection, chaos and overheat the polity.”

The NFIU’s decision was contained in the guidelines it released after a meeting with officials of commercial banks in Abuja. As noted by the NFIU, cash withdrawals and transactions of the joint accounts produce the biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole. Its conclusion:  “As far as the NFIU is concerned, the responsibility of the account as a collection account is fully reinstated.”

We urge the governors to abide by the guidelines and not seek to engage in legal fights over a matter Nigerians have been lamenting about.  They should note the reason for these measures: the need for the NFIU “to respond to threats of isolating the entire Nigerian financial system by other international financial systems because of deficiencies in our anti-money laundering and counter-terrorism financing implementation.”

NFIU’s reminder: “Therefore, it is no longer possible to allow the entire system to suffer the deliberate and expensive infractions or violations by public officials and/or private business interests.

“Henceforth, all erring individuals and companies will be allowed to face direct international and local targeted sanctions, in order not to allow any negative consequences to fall on the entire country.

“To be precise, with effect from 1st June any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100%, both locally and internationally.

“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government for a cumulative amount exceeding N500, 000 per day. Any other transaction must be done through valid cheques or electronic funds transfer.”

It seems the NFIU did its homework well before issuing the new guidelines. The move, it said, is backed by section 162 (6) (8) of the 1999 Constitution, as amended, which states, among others, that into the state joint local government account “shall be paid allocations to the local government councils of the state from the federation account and from the government of the state”; and, “The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state and not for other purposes.”

NFIU, which was cut out from the EFCC, has set June 1, 2019, as the take-off date for the new order. All well-meaning Nigerians should support it to ensure that local governments’ allocations go straight to their respective bank accounts. Any financial institution, public servant or stakeholder who violates the guidelines should be ready to be marched straight to jail.

With: The Oracle Today

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