The directive from the Nigerian Financial Intelligence Unit (NFIU) last week returned the financial responsibilities of the 774 local government areas back to the councils. As from June 1, therefore, banks that permit financial transactions from the accounts of local governments without the money first going into the councils’ coffers run the risk of being sanctioned.
The Economic and Financial Crimes Commission (EFCC) has been alerted to swoop on such offending banks. Secondly, the directive has now placed a limit of N500,000 on the daily cash transactions that a local government should undertake. All other expenses must be made by approved cheques or electronic payment channels, all geared to promote registered transactions by all the local governments in the country.
The Senate literally celebrated the development as it swiftly passed a motion supporting the local government financial autonomy, and hoping that the guidelines would help remove the alleged mismanagement of the State Joint Local Government Accounts (SJLGA) by state governors.
In a motion tabled by Sabi Abdullahi (Niger West) titled “Guidelines to reduce vulnerabilities created by cash withdrawals from local government funds throughout Nigeria,” he noted that the new guidelines were prompted by threats by international watchdogs to sanction Nigeria because of financial abuse. Senator Abdullahi stated 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.
The Senate, therefore, called on the 36 state governments and the Federal Capital Territory (FCT) to fully support the implementation of the new guidelines to promote good governance in the local government areas which means restoring good governance at the grassroots. Contributing to the debate the Deputy President of the Senate, Dr. Ike Ekweremadu, urged the Senate to liaise with the NFIU to ensure that the guidelines do not contradict parts of the Constitution. He urged state assembles to fast-track their work on pending constitutional amendments which would give legal backing to local government autonomy.
He cautioned that Section 162(6-7) as amended states that “each state shall maintain a special account to be called State Joint Local Government Account” into which shall be paid all allocations. Indeed, Section 162 (8) empowers the state to distribute allocation “among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the State.
NFIU spokesman, Ahmed Dikko, said the agency is committed to fighting money laundering, terrorism financing and the proliferations of weapons. In a statement explaining the rationale of the guidelines, he warned that the agency would implement a national sanctions regime in all areas. It would also release new reporting requirements on suspicious transactions for terrorism prone areas and on suspects taken into custody, to check vices of terrorism, proliferation of small arms, kidnapping, ethnic violence, cattle rustling, all with a view to providing credible intelligence for law enforcement and national security.
We welcome all the enthusiasm at the National Assembly and at the Executive Branch over the new directive on councils’ funds. After nearly 20 years in which the local governments were treated like barely worthy appendages of states, a late realisation that the local governments are the foundation of our society should be celebrated. It may have been 20 years late, but it is not too late.
The debate over the desirability and practicality of local government autonomy in a polity filled with warlords and godfathers has gone on for years, albeit, intermittently. The nonexistence of elected officials in most of the local governments is a direct evidence of the absence of democracy at the grassroots.
We cannot build a strong Federal Government when the local governments cannot take responsibility for even their local markets, refuse collection or the simplest of social services. If governors had used these councils as conduit pipes, they can now stop. But they cannot stop unless they are compelled to do so. The European Union has already placed Nigeria on its blacklist for money laundering, terrorist-financing and associated crimes. All eyes are watching Nigeria. The NFIU must be helped to work in the interest of the nation.