Hon. Johnson Emere Mba-Ngei has hailed the Federal Government over the financial autonomy being considered for local government councils across the country, describing it as a welcome development.
Mba-Ngei who condemned the continuous misuse of cash allocated to local government councils by state governments through the State Joint Local Government Accounts (SJLGA) however berated the suspended Chairman of Eleme Local Government Council, Hon. Philip Okparaji for failing to deliver even a single project since assumption of office as council chairman.
He said, in spite of the alleged interference by the state government in the funds of the local government councils, some chairmen such as those of Port Harcourt, Tai and Bonny have managed to deliver projects to at least justify the confidence repose in them by the electorates who voted for them.
` He regretted that, the case is completely different in Eleme where the suspended chairman, Hon. Philip Okparaji seem to be visionless and without plan for the people.
He advised the suspended chairman of council to see his suspension as a period of recess for sober reflection to garner ideas and energy to re-jig his administrative and development policy and strategy when eventually he is recalled back to duty.
It will be recalled that the Federal Government has outlawed the access to and continuous misuse of cash allocated to local councils across the country by state governments through the State Joint Local Government Accounts (SJLGA).
This was done via the newly inaugurated Financial Intelligence Unit (NFIU) which was excised from the Economic and Financial Crimes Commission (EFCC) as the Federal Government drew the battle line with state governments over financial autonomy for local councils.
The government set June 1, 2019, as the take-off date for the new order, making it compulsory for all LGA allocations to go straight to the respective bank accounts of the LGA and this comes less than a year after President Muhammadu Buhari signed the NFIU bill into law, thus separating the agency from the EFCC.
The decisions to stop local government allocations from going to state accounts are contained in the guidelines released by the NFIU after a lengthy meeting with officials of commercial banks in Abuja. The guidelines would make the joint account system currently in use only for the receipt of allocations from the federation account but not for disbursement.
The notice entitled, “Guidelines To Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria, Effective 1st June, 2019,” is said to have been prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse. The NFIU warned banks to comply with immediate effect, threatening to sanction any bank that flouts the order.
The agency said: “The NFIU requests all financial institutions, other relevant stakeholders, public servants and the entire citizenry to ensure full compliance with the provisions of the guidelines already submitted to financial institutions and relevant enforcement agencies, including full enforcement of corresponding sanctions against violations from June 1, 2019.
“Having realized through analysis that cash withdrawal and transactions of the State, Joint Local Government Accounts (SJLGA), poses biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole, the NFIU decided to uphold the full provisions of Section 162 (6) (8)of the 1999 Nigerian Constitution as amended, which designated that State Joint Local Government Account into which shall be paid allocations to the local government councils of the state from the federation account and from the government of the state.
“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. As far as the NFIU is concerned, the responsibility of the account as a collection account is fully reinstated.
“In addition, taking such measures was necessitated by prompting reasons on 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.
“Therefore, it is no longer possible to allow the entire system 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 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.
“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.
“The complete guidelines have been released to the governor of the Central Bank of Nigeria, the Chairman, Economic and Financial Crimes Commission (EFCC), the Chairman, Independent Corrupt Practices Commission (ICPC) and Chief Executive Officers of all banks and other financial institutions.
“Any state government that is willing to seek any expert economic advice in the unlikely event of these guidelines constituting an inconvenience to the management of the state can work with the NFIU and /or CBN.”
However, the Federal Government’s move has a legal hurdle to surmount as Section 162 (8) of the 1999 Constitution (as amended) empowers the states to distribute allocation to councils “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.”