Senate revisits Financial Autonomy for LGAs

The Senate after several failed attempts, wants to push for the granting of autonomy to local government areas. This time around, the Upper House plans to give legislative backing to the recent guidelines on local government funds issued by the Nigerian Financial Intelligence Unit (NFIU) in order to grant financial and political autonomy to local councils in Nigeria.
To realise the quest, the Senate is putting together a bill to alter the 1999 Constitution (as amended) to grant local government autonomy.
A senator, who is at the centre of the move, told that the Red Chamber is determined to succeed this time opted for anonymity because of possible persecution from his state governor, said, ‘’this time around, we would force this amendment into the throats of the governors in the country.’’
Already, the Senate has commenced altering the 1999 Constitution (as amended) to repeal the existing but much-criticised States and Local Government Joint Account.
But in a Bill for the Alteration of the Constitution sponsored by Senator Rose Oko, (PDP, Cross Rivers State) which has scaled the first reading, the Senate seeks to amend the constitution to give effect to NFIU directives to the state governors by altering Section 162 (6 & 7) of the 19999 Constitution.
Section 162 (6&7) states that “each state shall maintain a special account to be called State Joint Local Government Account into which shall be paid all allocations to the councils of the state from the Federation Account and from the government of the state; and that each state shall pay to the local councils in its area of jurisdiction such proportion of its total revenue on such terms and in such manner as may be prescribed by the National Assembly.”
In place of the existing Section 162 (6 & 7), the Senate wants them replaced by, “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.”
Specifically, the bill introduced more provisions to Section 162 which states that “each Local Government Council shall maintain a special account to be called “Local Government Council Allocation Account into which shall be paid directly such allocations to the Local Government Council from the Federation Account and from the Government of the State.”
It 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.”
“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.”
The Senate further proposes that “the Federation Account Allocation Committee shall deduct and remit the salaries of primary school teachers to a body as may be prescribed by the House of Assembly of each State.”
Latching on Section 162 (6 & 7) of the constitution, the state governors across the country have since the restoration of democracy in 1999 treated the local councils as mere appendages of the state governments. They hold on to the monthly fiscal allocations to the v councils; determine who occupies the position of chairman and to some extent councilors, and decide the projects to be executed by the councils.
Previous efforts by the National Assembly to alter the constitution to grant the councils autonomy were frustrated by the state governors.
However, the NFIU’s directive to states scheduled to begin in June 1 this year has faced hitches as the governors have approached the court to stop its implementation. It was designed to make the joint account system currently in use only to exist for the purpose of receiving allocations from the Federation Account and not for disbursement.
The Nigerian Governors’ Forum (NGF) said that its members have not reneged on their opposition to the attempt by the NFIU to grant financial autonomy to the councils.
The governors also approached President Muhammadu Buhari on the actions taken by the NFIU, which they accused of dabbling into a matter that was “beyond its mandate.”
In a letter to the president on the issue, the governors expressed dismay and anger at 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.”
Head, Media and Public Affairs of NGF, Abdulrazaque Bello-Barkindo, in a statement, had said that the governors, via the letter, also accused the NFIU of usurping their powers.
By NFIU’s order, it was compulsory for all LGA allocations to go straight to their respective bank accounts.
The decision is contained in the guidelines released by the NFIU after a lengthy meeting with officials of commercial banks in Abuja.
The NFIU, in its guideline, also pegged the total amount of cash that could be withdrawn from any LGA in a day at N500,000.
However, the NGF, in its letter to President Buhari, entitled “Re: NFIU Enforcement and Guidelines to Reduce Crime Vulnerabilities Created by Cash Withdrawal from Local Government Funds throughout Nigeria Effective June 1, 2019”, condemned the directive.
Copies of the letter, dated May 15, 2019, were sent to the attorney-general of the federation, Abubakar Malami (SAN), the acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, the governor of Central Bank of Nigeria (CBN), Godwin Emefiele, the director-general of the Department of State Services (DSS), Mr. Yusufi Bichi, and all the other 36 state governors.
The governors drew the attention of the president to Section (6) (a) and (b) of the 1999 Constitution, which confers on the states and the National Assembly the powers to make provisions for statutory allocation of public revenue to the councils and within the states, respectively.
Also, the governors added, Section 162 (6) expressly provides for the creation of the States Joint Local Government Account into which shall be paid all allocations to the LGs from the Federation Account and from the government of the state.
As the feud between the governors and the NFIU raged, some prominent lawyers have declared support for the attempt to guarantee financial independence for the third tier of government.
They, however, called for greater display of transparency in the management of funds by the local government Councils.
In separate interviews, the lawyers clarified that in the 1999 Constitution (as amended), state governors lacked the power to distribute statutory allocations that accrued to LGs in their states.
According to them, Section 162 of the constitution merely permitted the transfer of funds from the Federation Account to LGs through the account of states, and not for governors to assume the responsibility of sharing such fund to the LGs.