Senate in fresh bid to grant financial autonomy to local government

The push for a financially independent local government system in the country has been re-energised in the Senate. A bill to amend the constitution to achieve financial autonomy for local government councils has already been gazetted and is ready for a debate on the floor of the Senate this week.

A copy of the bill seen by The Guardian stipulates the abrogation of the existing and much-criticised states and local government joint account. In its place, “each local government council is to create and maintain its own special account to be called Local Government Allocation Account into which all allocations due to the local government council shall be paid directly from the Federation Account and from the government of the state.”

The bill, sponsored by Senator Rose Oko (PDP, Cross Rivers State), further mandates each state to “pay to local government councils in its area of jurisdiction such proportion of its internally generated revenue on such terms and in such manner as may be prescribed by the House of Assembly.”

Also, “The House of Assembly of each state shall by law prescribe such percentage of the money allocated to the state and its local government council from the Federation Account to be used for the purpose of payment of salaries of primary school teachers and such other purposes as it may determine.”

Meanwhile, the Nigeria Governors’ Forum (NGF) confirmed yesterday through it’s Head, Media, and Public Affairs, Abdulrazaq Bello-Barkindo, that the 36 state governors have not reneged on their opposition to the attempt by the Nigerian Financial Intelligence Unit (NFIU) to grant financial autonomy to local government councils.

Last May, when the NFIU issued some guidelines to allow local government councils direct access to money granted to them from the Federation Account, the move attracted serious criticisms from the governors’ forum.

The governors also approached President Muhammadu Buhari on the action taken by the NFIU, which they accused of dabbling in a matter “beyond its mandate.”

In a letter to the president, they expressed dismay over what they called the NFIU’s “brazen attempt to ridicule” their collective integrity and “show total disregard for the constitution of the Federal Republic of Nigeria (1999) as amended.”

The NFIU, which was excised from the Economic and Financial Crimes Commission, set June 1, 2019, as the takeoff date of the new order, making it compulsory for all local government allocations to go straight to their respective bank accounts.

The decision was contained in guidelines released by the NFIU after a lengthy meeting with officials of commercial banks in Abuja. The NFIU also pegged the total amount of cash that could be withdrawn from any local government per day at N500,000.

But the NGF condemned the directive in its letter to Buhari, titled “Re: NFIU Enforcement and Guidelines to Reduce Crime Vulnerabilities Created by Cash Withdrawal from Local Government Funds throughout Nigeria Effective June 1st, 2019.”

The then NGF chairman Abdulaziz Yari had argued that nothing in the NFIU Act 2018 gave the body the powers that it sought to exercise in the guidelines. He said the unit was acting in excess of its powers and in complete disregard for the constitution.

Yari also accused the NFIU of “stoking mischief and deliberately seeking to cause disaffection, chaos and overheat the polity.”

In a related development, some lawyers have declared support for the attempt to guarantee financial independence for the third tier of government. They nevertheless called for greater transparency in the management of funds by the local government councils.

A professor of law, Mr. Earnest Ojukwu, SAN, said: “I don’t think any law states that local government funds must be passed through the state. But just passing money directly to local governments does not solve the fundamental issue of transparency, openness, and accountability.

“We must also ensure that local governments abide by accountability standards. The decision does not also solve the challenge of governors interfering and sacking elected chairmen and councilors.”

Similarly, Yunuz Uztaz, SAN, said: “Section 7(6) of the Constitution provides that it is the National Assembly that shall make provisions for statutory allocation to the local governments. There is no provision that their money should go through the state governors.”

On his part, a constitutional lawyer, Mr. Mohammed Abeny, SAN, said: “The present constitution is based on three tiers of government to wit – federal, state and local governments.

“Allocation of revenue has followed that pattern. The fact that state governors have continued to divert local government financial allocations to their use is an aberration that is contrary to Section 7 of the constitution under which the financial autonomy of local government councils is guaranteed. Whatever the Federal Government can do to restore the financial autonomy of local government councils will be welcomed.”