Court denies state governors’ wish on LG funds – Independent Observers

Court denies state governors’ wish on LG funds

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By Andy Chukwu

The Federal High Court on Monday declined to restrain the Nigerian Financial Intelligence Unit (NFIU) from implementing its recent guidelines on local government funds.

At the resumed hearing on Monday of the case instituted by the Nigeria Governors Forum (NGF) against the NFIU, Justice John Tsoho of the Abuja Division declined to allow the governors continue to draw funds from local government accounts until the matter had been concluded by the court, which could take several months or even years.

Further hearing on the matter could not continue on Tuesday, after the lead lawyer for the governors, Lateef Fagbemi, failed to appear in court as he was handling another matter at the Presidential Election Petitions Tribunal.

Although there was an initial agreement by all parties to wait for Fagbemi, who had promised to appear in court before noon, the court eventually adjourned the matter when he did not show up.

A further hearing had been adjourned till October 23 for all applications, including one challenging the court’s jurisdiction, to be heard.

The adjournment clearly was yet another setback to the nation’s 36 governors in their effort to keep control of local government finances in their respective states.

In a guideline that took effect on June 1, the NFIU directed banks not to honour transactions in the joint accounts of state and local governments. It said such accounts should only be used to distribute allocations to accounts of local governments directly.

However, the NGF is challenging this in court, saying the directive was illegal because it contradicted the Constitution.

 The Constitution prescribed joint ownership of account between a state and all local government areas under it, but there have been claims that the governors have been mismanaging the funds by bullying local authorities into silence.

The NFIU had on May 6 issued ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria,’ which sought to stop governors from tampering with funds meant for local government areas forthwith.

Despite the stiff opposition by the governors, including several meetings with President Muhammadu Buhari, the guidelines took effect from June 1.

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