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Senate backs NFIU on new guidelines

Senate

The Senate has called on the State Houses of Assembly yet to approve the constitution alteration bill geared towards granting a full autonomy to local governments to do so before the expiration of the Eighth National Assembly.

This call came barely 48 hours after the Nigerian Financial Intelligence Unit (NFIU) issued a new financial guideline on the operations of the local government accounts expected to take effect on the 1st of June.

BusinessDay reports that the life of the Eighth Senate ends on June 8, 2019.

In a motion sponsored by Aliyu Sabi Abdullahi on Wednesday, the Senate expressed concern at the continuous pillage of cash allocated to local councils across the states through the State Joint Local Government Accounts.

Supporting the moves by NFIU, the Senate said the guidelines limit cash transactions in the accounts of local governments to a daily maximum of N500,000 and subsequent withdrawal must be approved by approved cheques or electronic payment channels to promote registered transactions by all the local governments.

It called on the 36 state governments and the FCT to fully support the implementation of the new NFIU guidelines to promote good governance at the local government areas and restore governance at the grassroots levels.

It equally urged all financial institutions in Nigeria to support the implementation of the new guidelines, even as it called on the Federal Government to urgently fund the operations of the Agency to enable it earn the confidence and trust of Nigerians and its international partners.

Recall that the NFIU had recently released a new financial guideline on the operations of the local government accounts.

Titled ”Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria”, the guidelines provide that the State Joint Local Government Account is only a collection account of funds to be shared to only Local Government Accounts in accordance with Section 162 (7) of the 1999 Constitution and not for any other transactions or purpose.

It also limits cash transactions in the accounts of local governments to a daily maximum of N500,000 only while subsequent withdrawals must be by approved Cheques or electronic payment channels to promote registered transactions by all the local governments.

In his contribution, Deputy Senate President, Ike Ekweremadu, argued that the position of the Senate that financial institutions should support the implementation of the new guidelines, contravenes Section 162(6 and 7) of the 1999 Constitution (as amended).

The section provides 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 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.”

Ekweremadu, in his intervention, called for caution. He advised that the position of the Senate must conform with what is permissible in the constitution.

He warned 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.

Many former governors turned senators, who supported the motion, said the reforms were overdue and will help free up funds for the development of local governments.

Senate President, Bukola Saraki, who presided over the session, urged the standing committees on Anti-Corruption and Financial Crimes; State and Local Governments, to follow up and ensure that positions reached by the Senate are adhered to.

According to him, local governments as currently constituted, cannot deliver dividends of democracy to the people as long as state governors are in charge of the funds.

He said: “The motion addresses two things. First of all, as we all talked about the local government administration which has been an issue of great concern. First some of us that had the opportunity of being governors and legislators, it is clear that a few bad eggs who tend to give the whole system a bad name in this area. And I think apart from all this, there must be a kind of interface between the National Assembly and governors to finally allow these local governments to have their autonomy. Because it is clear that this is affecting local government administration. So I hope that the state assemblies will be able to make the necessary amendments but it will require some kind of working with the governors to allow this to happen. And I think it is time the governors allow this to happen. I think it is better to also try the full autonomy of local governments.

“The second area is to commend the NFIU who within less than two months of existence is beginning to bring value. To me, things like this give me great happiness and our colleagues because this is a creation of the National Assembly”.

 

OWEDE AGBAJILEKE, Abuja