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The Senate yesterday adopted a motion demanding some stakeholders like State Houses of Assembly and the Presidency to expedite action on granting financial autonomy to local government councils across the country.
The Senate also accused state governors of mismanaging the state/local government joint accounts.
The Senate’s resolution followed a motion sponsored by Senator Aliyu Sabi Abdullahi (APC, Niger North) as a result of the new financial guideline issued by Nigerian Financial Intelligence Unit (NFIU) on Monday.
NFIU’s new guidelines mandate financial institutions to distribute funds accruable to local governments among the local government councils of that state and not for other purposes.
The NFIU had ordered that with effect from June 1, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, locally and internationally.
“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000 per day.”
During debate on the motion, the deputy Senate president and chairman of the Senate Committee on Constitution Review, Ike Ekweremadu, urged the Senate to liaise with the NFIU to ensure that the guidelines do not contradict any part of the Constitution.
He appealed to state assemblies to fast-track their work on pending constitution amendments which would give legal backing to local government autonomy.
Ekweremadu, however, warned that the Senate’s position – that financial institutions should support the implementation of the new guidelines – contravenes Section 162(6&7) of the 1999 Constitution, as amended.
According to the section, “Each state shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the local government councils of the state from the Federation Account and from the government of the state.
“Each state shall pay to local government 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”, he said .
Warning that if any section of the constitution is flouted, governors may challenge the move in court, he said the best option was to amend the various sections of the constitution to grant full autonomy to local governments.
Senator Abdullahi in the motion tagged: “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June”, said the issuance of the new guidelines was prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.
According to him, 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 further agrees that the NFlU guidelines do not serve any purpose other than freeing the Financial System from being flooded with cash which criminals use to escape transparency, accountability, and criminal investigation,” he said.
But former Plateau State governor, Senator Jonah Jang, faulted the motion.
He submitted that: “In some states, the state government takes over the local government funds and abuse them. We have also witnessed local government chairmen signing cheques at the beer parlours.
Also contributing to the debate, Deputy Senate majority leader, Bala Ibn Na’alla, said: “If we succeed in executing this, 60% of corruption in Nigeria will be resolved. This will be a major landmark if the Senate decides to follow through its resolutions.
“Let all financial institutions agree, and all of us agree that we must follow these guidelines and let the local governments be autonomous.”
Many former governors in the Senate who supported the motion said the reforms were overdue and will help free up funds for the development of local governments.
President of the Senate, Bukola Saraki, who presided, urged the standing committees on Anti-Corruption & Financial Crimes and States & Local Governments to follow up and ensure that decisions reached by the Senate are adhered to.
He said the local governments as currently constituted cannot deliver dividends of democracy to the people as long as state governors are in charge of the funds. (Leadership NG)
The Senate also accused state governors of mismanaging the state/local government joint accounts.
The Senate’s resolution followed a motion sponsored by Senator Aliyu Sabi Abdullahi (APC, Niger North) as a result of the new financial guideline issued by Nigerian Financial Intelligence Unit (NFIU) on Monday.
NFIU’s new guidelines mandate financial institutions to distribute funds accruable to local governments among the local government councils of that state and not for other purposes.
The NFIU had ordered that with effect from June 1, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, locally and internationally.
“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000 per day.”
During debate on the motion, the deputy Senate president and chairman of the Senate Committee on Constitution Review, Ike Ekweremadu, urged the Senate to liaise with the NFIU to ensure that the guidelines do not contradict any part of the Constitution.
He appealed to state assemblies to fast-track their work on pending constitution amendments which would give legal backing to local government autonomy.
Ekweremadu, however, warned that the Senate’s position – that financial institutions should support the implementation of the new guidelines – contravenes Section 162(6&7) of the 1999 Constitution, as amended.
According to the section, “Each state shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the local government councils of the state from the Federation Account and from the government of the state.
“Each state shall pay to local government 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”, he said .
Warning that if any section of the constitution is flouted, governors may challenge the move in court, he said the best option was to amend the various sections of the constitution to grant full autonomy to local governments.
Senator Abdullahi in the motion tagged: “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June”, said the issuance of the new guidelines was prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.
According to him, 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 further agrees that the NFlU guidelines do not serve any purpose other than freeing the Financial System from being flooded with cash which criminals use to escape transparency, accountability, and criminal investigation,” he said.
But former Plateau State governor, Senator Jonah Jang, faulted the motion.
He submitted that: “In some states, the state government takes over the local government funds and abuse them. We have also witnessed local government chairmen signing cheques at the beer parlours.
Also contributing to the debate, Deputy Senate majority leader, Bala Ibn Na’alla, said: “If we succeed in executing this, 60% of corruption in Nigeria will be resolved. This will be a major landmark if the Senate decides to follow through its resolutions.
“Let all financial institutions agree, and all of us agree that we must follow these guidelines and let the local governments be autonomous.”
Many former governors in the Senate who supported the motion said the reforms were overdue and will help free up funds for the development of local governments.
President of the Senate, Bukola Saraki, who presided, urged the standing committees on Anti-Corruption & Financial Crimes and States & Local Governments to follow up and ensure that decisions reached by the Senate are adhered to.
He said the local governments as currently constituted cannot deliver dividends of democracy to the people as long as state governors are in charge of the funds. (Leadership NG)
