According to the National Bureau of Statistics, in the past 12 years, federal allocations to local government councils through the states amount to N15.5 trillion. But across the 774 local government areas in Nigeria, there is nothing on ground, in terms of physical infrastructures like good roads, health centres, schools, markets, etc, to justify allocations of such staggering amounts.
It is in light of such mind-bogging figures, no doubt, that the Nigeria Financial Intelligence Unit (NFIU) gave the marching order to local government councils to start getting their allocations directly from the Federal Government effective from June 1, 2019. In fact, the NFIU not only asked them to withdraw directly from what the Nigerian Governors’ Forum (NGF) sees as a constitutionally approved joint account, but also promised to put in place, as part of its mandate, a tighter fiscal control to prevent diversion of local government funds by state governments.
Already, the NGF has instituted legal action to contend NFIU’s powers to interfere in the running of what they see as a constitutionally backed joint account belonging to both the state and local governments. The body’s argument is, the NFIU’s guidelines are in breach of Section 162(6) of the 1999 Constitution (as amended) which provides for the creation of the States Joint Local Government Account (SJLGA). This account, it insists, is expected to contain all allocations to the local government councils of the state from the federation account as well as allocations of state government. The body also argues against the applicability of the guidelines on the basis that local government councils are a creation of the constitution and not reporting entities like financial institutions.
But NFIU is of the view that the joint account system currently in use by state and local governments exists only for the purpose of receipt of allocations from the federation account and not for their disbursement. As things stand now, only the court can decide who is right and who is not, between the two contending parties.
In fulfillment of what it sees as its “statutory responsibility” to monitor financial transactions by local governments, the NFIU later handed down a mandate to local council chairmen to limit their daily withdrawal to N500, 000 and vowed to monitor the process to ensure they don’t exceed the limit. But it’s been about three months since the LGAs were granted, as it were, financial quasi-autonomy. The question is: how have they fared since then? What has changed and what has not? These are some of the questions Saturday Sun correspondents set out to answer by talking to concerned local government chairmen.
They found out that in some states, while the financial autonomy could be said to have made governance to trickle down to the grassroots, with some semblance of physical infrastructures put in place to show for it, in many states where only caretaker committees are on ground, there appears to be not much change as administrators still work under the shadows of their state governments where they are only able, at the end of the day, to pay workers’ salaries, with the meagre amount they are being given. But in all, they agree that much can be done if the local government areas are fully and truly granted financial autonomy.
The situation in Edo
In a chat with Saturday Sun, Jenkins Osunde, Chairman of Oredo Local Government Council, who also doubles as the state chairman of Association of Local Government of Nigeria (ALGON), said that the governor, Godwin Obaseki, has never tried to interfere with their management of their monthly allocations from the federation account. Asked his opinion about the pegging, by NFIU, of councils’ daily cash withdrawal at N500, 000, he shrugged his shoulder and said: “We have no option; we are complying. Once they have taken a decision, we have no option but to comply. So far, so good.”
LGA financial ‘autonomy’, the Anambra model
In Anambra State, local government chairmen interviewed said they enjoy some measure of autonomy in the management of the allocations even though the council areas are not run by democratically elected chairmen and councillors . The local government system in the state for many years has been administered from the Government House through the Commissioner of Local Government, with the assistance of Transitional Committees headed by a chairman for each council area. Appointed by the governor, their tenures are renewable every three months.
Before the onset of the quasi-financial autonomy, the state was running what it called Unified Local Government System, whereby expenses from the joint account were centrally controlled and used for common services in the local governments. But in the past three months nothing much has changed with the direct allocation directive because movement of funds is still being subjected to the Centralized System of Anambra State Local Government Funds Administration. This might be the reason the transitional chairmen approached on the matter declined to comment.
Speaking with our correspondent, the state ALGON chairman, Asha Raphael Nnabuife, who is also the transition chairman, Idemili Local Government tagged the NFIU directive a welcome development while noting that they have no problems in Anambra State because the transition chairmen do not take directives from the governor on management of their council allocations.
“Every local government in Anambra State as far as I know gets their direct funds and we spend the money as it is expected of us,” he said. “We don’t take any instruction or directive from the governor as regards the allocation; in fact we have to thank our governor for his cooperation in making sure that all the local governments in Anambra State get their fund directly as it is allocated from the federal allocation.”
And, he sees the pegging by NFIU, of limit of daily withdrawal at N500, 000 as a blessing in disguise. “Actually, there is no problem even with that because it helps us not to carry cash around,” he explained. “The directive said you can issue cheques, you can do transfers and you can only cash N500, 000 and we’ve been abiding by that. Any expenses or anything you want to do that is above N500, 000, you simply write cheque or do transfer in favour of the withdrawer. I think it is even simpler now because there is danger when you carry big cash, but now when you take your cheque or you get your transfer, you go to the bank at your convenience and withdraw the money if you are paying contractors or workers. In fact, it has helped us because even our daily workers who get about N10, 000, N15, 000, are now encouraged to open account and go to the bank to cash their cheques.”
About two months down the line since the issuing of NFIU’s directive on direct withdrawal, the council boss said that nothing much seemed to have changed by way of disbursement as allocations have always come to them directly through the unified local government system, long before the directive came. “If you allow some local governments, they will not be able to even pay salaries, so Anambra State due to the joint account comes together whereby one local government will be able to come to the aid of the other because urban local government may get more but they have more expenses.”
He then clarified his point: “It has never been a problem in Anambra State because we have a governor that knows how to manage funds, knows how to make sure that this local government if you are getting little, the other local government that is getting more, from the joint account system it can be balanced; services are given at the same time, development are going at the same pace. What this local government is doing the other is also doing depending on what they want to do. So when this direct fund directive came, being something we are used to in Anambra, we do not have much problem both with the old and new systems.”
The Osun challenge
In Osun State, Chairman of Oshogbo Local Government, Adegoke Asiwaju, said that the financial autonomy granted the local government areas is still fraught with challenges. He noted that before the autonomy, every chairman had the freedom to execute any project or programme of their choice, depending on the needs of the people. But with the onset of the financial autonomy such freedom was curtailed because the projects or programmes that council bosses execute at the local government levels had to be streamlined by the state government due to the issue of joint account with the state government through which the local governments receive their allocations.
“In the past, Olorunda Local Government Area could be interested in promoting sports, while Osogbo Local Government could prefer O’Yes or road construction projects,” he explained. “But with the current financial autonomy structure, that is no more.” He added that the state government now determines the projects to be embarked upon to ensure uniformity across the local government areas. “Although it is the money that is allocated to the local government that we use in executing projects, we are compelled to comply with the arrangement by government .”
He noted that in view of the joint account with the state government, the federal statutory allocations to the local government areas are still being channelled through the account with the state. And, before the allocation eventually get to the local governments some underlying frontline charges or debts would have been deducted. “As a result, it is the little that comes to us after the deductions that we use at our levels.” He lamented therefore that despite the autonomy, lack of funds remains a challenge.
“There are a lot of fiscal projects to be executed but there is lack of funds and our people are complaining,” he said. So, how has he and his colleagues been coping with the financial challenges? He looked at you and said: “We are only trying as much as possible to manage the little that we receive. The autonomy just started. So, we are hoping that things will get better.” He added that the allocation sharing had not been regular. “It fluctuates. Sometimes, it is low, sometimes, it rises.” Like his counterparts in Anambra he does not see much difference between the past and now, “though the situation is better than before.”
He believes that the autonomy can be made more effective when the section of the constitution mandating joint account with the state government is amended to ensure that local government areas get their allocations directly.
But Femi Ahmed, chairman of Olorunda Local Government Area, however, said that before the autonomy was granted, there was a challenge of lack of funds, but since the onset of the newly introduced financial autonomy, “when our allocation gets to the state government through the joint account, it pays us directly. We can now pay our staff directly. There is no more state government interference.” He added that the current financial situation at the local government was better than before.
Limited autonomy in Plateau
In Plateau State, most of the local government areas there are operating under the shadows of the state government as they are still holding on to the old regime whereby the local government subventions come through the state joint account. In Jos North, Jos South, Riyom and Barkin-Ladi local government areas where elections are yet to be conducted to put into power legally elected chairmen, the situation appears to be more pronounced. Funds are made available to the caretaker local government chairmen primarily to pay workers salaries. Besides that, no physical development is visible at the third-tier of government in the state.
Chairman of Qua’an Pan Local Government Area, Isaac Kwalu, believes that if full financial autonomy is granted to the local governments, there will be massive physical developments at the grassroots. For that, he prays that the issue of financial autonomy to local government areas that is, today, a subject of litigation is resolved very soon.
“We don’t have problem with payment of salaries, we are up-to-date, but with financial autonomy, we are expecting that there will be better governance at the grassroots if the autonomy comes,” he said
Asked if the much-trumpeted financial autonomy has not come to his local government area, in light of his remarks, he gave a hedgy answer: “For now, I cannot tell you yes or no that the finances from the federal government comes straight to the local government coffers because there are issues,” he said. “There is a constitutional provision that has not been amended; we are still holding on to see which position we are now.”
He noted that the local government areas are battling with issues of insecurity, lack of potable drinking water, education and provision of health services and added that he is making diligent use of available resources at his disposal to tackle the menace.
His counterpart at Kanke Local Government Area, Emmanuel Lar, also agreed that payment of salary has not been a problem. He explained that the NFIU directive did not say that joint account between local government and state has been removed. “That joint account will be a channel through which local government funds would be sent directly from the federation account is a constitutional provision and, to the best of my knowledge, it has not been amended,” he said. “But if amended that will bring development nearer to the grassroots; it will afford the local government the needed finances to develop the rural areas.”
He explained that in his local government area, the challenges of providing potable drinking water, good health services and good roads remain pressing and expressed his belief that with full financial autonomy, these challenges would be reduced.
Caretaker financial autonomy in Imo
In Imo State where the tenure of the current transition committee chairmen put in place by the Chief Emeka Ihedioha administration would be ending in December, nothing much appears to be happening despite the said financial autonomy. The major problems that they are faced with are infrastructural decay especially rural roads. Besides, some of the council areas do not have befitting secretariats for council workers.
Speaking on this sorry development, the Council Chairman of Owerri West, Innocent Ekenma expressed concern on the deplorable state of roads not only in his local council but indeed in the 27 local government areas of the state. He added that it is in light of this fact that the council chairmen have decided to launch construction equipment with the approval of the state government. He noted that the procurement of the equipment would assist the local government areas to rehabilitate most of the rural roads which may not be on the radar of the state government.
According to him, the construction equipment would consist of pay loader, tipper, roller, caterpillar and grader that would enable the councils to carry out their responsibilities particularly as regards rural road construction.
“I am renovating our stadium very soon and we are carrying out some rural electrification,” he explained. “Owerri West Local Government Area is an urban area and lack of power and poor road infrastructure are major problems here; this is also the only local government that has three federal institutions, Poly Nekede, FECOLART and FUTO, in addition to the Police Training College; 34 Artillery Brigade Command, Obinze. So, there would be a lot of projects here”.
No matter the financial autonomy granted the local government areas, Chief Charles Abara, Transition Council Chairman of Ngor Okpala, believes that no degree of commitment into tackling the problems on ground can succeed in wiping out the eight-year accumulated problem of infrastructural decay. According to him, the council did not have electric power before his assumption of office which, he said, has been restored, not to talk of workers being owed backlog of salaries and allowances. He disclosed that the roads would be taken care of immediately the rain stop as there is nothing they can do at the moment.
Silas Onyeiwu, council chairman of Onuimo said that their major problem is dilapidated roads in the council. He disclosed that the lack of access roads to the various communities in the council continue to remain a recurring problem because of the council’s topography.
Suspending capital projects in Ondo
Like in Imo, Plateau and Anambra, Ondo State where financial affairs are being managed by caretaker committees in all its 18 councils, rather than by duly elected chairmen, the picture also appears not quite rosy. Speaking with our correspondent, publicity secretary of the Association of Local Governments of Nigeria (ALGON) in the state, Mr Abayomi Adesanya, said the local government system as a result of the development can only embark on limited projects.
Adesanya who is the chairman, Okitipupa Local Government Area of the State, said the allocations accruing to the LGAs were not enough to embark on capital projects, adding that the council administrators only manage to execute some projects and pay workers salaries. Despite the situation, the chairman said he embarked on rehabilitation of roads, grading of roads and repair of vehicles within his two months administration. He lamented that the poor economic situation affects operations and activities of the local government system in the country.
“Our case is a bit different in Ondo State,” he said. “We are not substantive chairmen who were elected into office; we are caretaker administrators appointed by the governor and the constitution provides that we function for only six months after which our appointment can be renewed by the governor. So, I cannot make much comment on the subject matter. All I can say is that the poor economic situation affects many things. Our councils can only embark on limited projects and to the best of our ability, we have done our best,” he added.
Worst-case scenario in Ogun
Talking about the quasi-financial autonomy for local governments, the most affected appears to be Ogun State where all the 20 local government chairmen and 37 LCDAs, have been suspended through a resolution by the House of Assembly which accused them of financial misappropriation. As a result of this, bank accounts of the LGAs have also been frozen by the state assembly, while the chairmen are currently undergoing probe by the House, over the allegations of financial misappropriation levelled against them.
Head of Local Government Administration (HOLGA) in each local government, who were directed to take over the affairs at their respective councils, when contacted, declined comments on the issue, by pleading the Official Secret Act of the Civil Service rule. But one of them who spoke with our correspondent on the basis that his name would not appear in print said that if the financial autonomy could be granted local governments, the third-tier of government would be better off.
He added that state governors have crippled local government administration by hijacking their funds from the federal government. Step should be taken in the right direction, he noted, by totally freeing LGAs from the grip of state governments, through amendment of the joint account law, which ties the financial fortune of local governments to that of the states.
•With reports from Tony Osauzo (Benin), Laide Raheem (Abeokuta), Bamigbola Gbolagunte, (Akure), Geoffrey Anyanwu (Awka), Gyang Bere (Jos), George Onyejiuwa (Owerri) and Clement Adeyi (Osogbo).