The effort to institute direct funding of Local Government Councils scaled two tests at the end of May. The Supreme Court dismissed the objections of governors to the change and to their practice of dismissing elected LG executives. Chairmen of local governments in Oyo State refused to accept the peremptory dissolution of the elected councils by new Governor Seyi Makinde, citing a court injunction.
Beginning June 1, Local Government Councils would receive their allocation of funds directly from the federal purse. The Nigerian Financial Intelligence Unit (NFIU) forcefully inserted itself into the mix to bring about this paradigm change. Understandably, the governors are up in arms, accusing NFIU of dabbling “into a matter that is beyond its mandate”, ridiculing the integrity of the governors and acting against the constitution.
While there is indeed unease about the implications for federalism on both the for and against sides of the NFIU plan, the ayes have it overwhelmingly. Many citizens support the NFIU action because of the failures of the LG system traced mainly to the governors. BusinessDay supports the measure for the many benefits it will bring, including contestation of the constitutional issues for clarity.
For 20 years, the local government system has failed the country. Development does not happen at the arm of government closest to the people contrary to the intendment of the constitution and various reforms. Why? Governors turned the local governments into branch offices that have responsibility without accompanying financial and political authority. They withhold funds sent into the Joint Local Government and State Accounts and stultify political development at that level by appointing caretaker committees instead of allowing elections into the LGs. They dismiss elected local government councils.
More than internal matters are involved in the NFIU action. It reflects the concerns of foreign governments and agencies about transfers and withdrawals traced to the local government funds that governors supervise.
The NFIU stated, “Having realised 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 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”.
With funds at their disposal, LG executives would have no more excuses for failure to deliver on their mandates. It should encourage healthy competition among LGAs, provide a platform for young politicians and allow them to build a track record of performance. It also follows best practice in most democracies. Top performers at LG level move on to higher levels of government as governors, senators and representatives. Some contest for the presidency with a solid record.
More significantly, direct funding should make LGAs work for the people as the arm of government closest to citizens. It should revive interest in governance at that level. If they are smart, the LGA executives should know that the implementation of this scheme is their opportunity to prove that democracy can deliver the goods to citizens, thereby averting the looming revolt of the poor.
The matter of the alleged breaches of the constitution by the action of NFIU should excite our best legal minds. The governors are themselves not innocent of breaching the provisions of the constitution regarding local government funds and administration. Currently, many states have local government administrators because the governors refused to allow elections.
BusinessDay’s support is not unconditional. We recommend that monies disbursed to LGAs should be published, as one-time Finance Minister Ngozi Okonjo-Iweala instituted years ago. Citizens and civil society organisations should monitor fund utilisation and be involved in defining priorities and programmes. LGAs should not see the development as “their turn to eat”.
Let us test this new proposition for all the good it can bring.
