Journalism of Courage

774 councils’ autonomy gets judicial stamp as court bars governors from tampering with their funds

The NFIU issued a guideline on money laundering risk and vulnerabilities advising all banks not to honour transactions from joint accounts.

A landmark judgment was delivered on Monday in Abuja barring state governors from controlling and disbursing local government funds across the country.

Persecondnews reports that Justice Inyang Ekwo of a Federal High Court sitting in Abuja gave a judgment in favour of the Federal government and Nigerian Financial Intelligence Unit (NFIU) on local government joint accounts nationwide.

The NFIU had in June 2019 issued guidelines aimed at curbing crime vulnerabilities created by cash withdrawals from local government accounts by various state governments.

The Nigerian Governors Forum had sued  FG and NFIU for “interfering with state government powers to initiate transactions” on Local Government  Joint accounts, citing provisions of the 1999 constitution, Persecondnews recalls.

The NFIU issued a guideline on money laundering risk and vulnerabilities advising all banks not to honour transactions from joint accounts.

It directed that the States/Local Governments Joint Accounts should be used only for receiving funds and subsequently transferring them to Local government accounts only.

The guidelines also reduced cash withdrawal from local government accounts to N500,000 daily.

Since the guidelines came into effect, most local governments across the country stopped facing challenges in payment of staff salaries.

Reacting to the judgment, the Director/CEO of NFIU, Mr Modibbo Tukur, described it as a good development.

“The Federal Government is always ready to protect both states and local governments by making funds available to discharge their responsibilities,” he said in a statement by Mr Ahmed Dikko, a media analyst.

Tukur pointed out that by the ruling, councils can now decide on how their funds spent which can be channelled to improving local security.

“From this judgment and from today, all transactions on Local Government funds will be disclosed to ICPC and EFCC 100% and will be reported continuously.”

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