HAD the Nigerian Financial Intelligent Unit (NFIU) been granted autonomy to operate for the past 10 years, with its new guidelines on financial autonomy to local governments, it would have helped the 774 local governments across the country access a whopping sum of N14.7 trillion without the intervention of the all-powerful state governors.
The NFIU had directed that as from June 1, 2019, local governments would have direct access to their statutory allocation, and no governor would be able to divert the fund into the state’s account.
The new measures, introduced by the present administration to restore local governments’ financial autonomy is coming less than a year after President Muhammadu Buhari signed the NFIU bill into law, thus separating the agency from the Economic and Financial Crimes Commission (EFCC).
According to data from the Office of the Accountant-General, N14,708,838,964,375.70 has been allocated to the 774 local governments between 2008 and 2018, and larger percentage of this allocation has been diverted by governors into the state account.
On state basis, the data reveals that local governments in Kano state have received the highest allocation amounting to N832.6 billion, followed by Lagos state – N829.6 billion, Katsina – N613.4 billion, Oyo state – 569.6 billion, and Kaduna state – N504.9 billion as the top five states with the highest amount of allocation to its local governments.
Least five states States whose local governments have received the lowest allocation in the past 10 years are Bayelsa – N167 billion, Gombe – N219.4 billion, FCT – 226.8 billion, Ebonyi – N230.9 billion, and Nasarawa – 240.4 billion.
The allocation sharing principle may not be far from the 2006 population figures that put Kano as the most populated state and followed by Lagos state. From the bottom, FCT had the lowest population figure and followed by Bayelsa state.
The population figures and the number of local governments in each state are important factors considered in the allocation of resources.
One interesting thing is that, of the first 100 local governments with the highest allocation, only eight local governments from the South-South region of the country made the list – the region where the country gets about 75 per cent of its earnings.
What the new NFIU guidelines say
The NFIU has banned banks, governors, financial institutions, public officers and other stakeholders from meddling with the statutory allocations of local governments beginning from next month.
The guidelines were said to have been prompted by threats by the international financial watchdog to sanction Nigeria because of abuse of financial abuse.
According to a report by the Cable Newspaper, Ahmed Dikko, NFIU spokesperson said the agency is committed to fighting money laundering, terrorism financing and proliferation of weapons.
The new guideline 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.
Ordeals of local government areas
Local governments as currently constituted, cannot deliver dividends of democracy to the people as long as state governors are in charge of the funds, said Ibrahim Khaleel, National President of the National Union of Local Government Employees (NULGE) at a press conference in support of the guidelines.
“It is no longer news that effectively from around 2003, state governors across all the political parties have converted Local Government funds coming from the Federations account into a source of funds which they dip their hands at will without any term of accountability because of their absolute control of the State Joint Local Government Account (SJLGA).”
Khaleel also said that local government finances have over the years been scandalously abused by state governors and their collaborators.
Also, Bobboi Kaigama, President of the Trade Union Congress had also said that cash transaction of state governments from the joint local government accounts is a threat to development at the grassroots and that it also fans the embers of insecurity and major crisis.
“The governors have made a mess of the Joint Account system and have deprived local governments of their development initiative in their local areas leading to bad leadership,” he said.
In states where the local government chairmen are elected — they lament how governors take all the monies meant for council from the federation account and sometimes, hand them a ‘chickenfeed’ or “the crumbs falling off the master’s table”, let alone states where local government caretaker chairmen are imposed by the governors.
Under the current sharing formula, the federal government takes the lion share of 52.68 per cent from the federation account. The 36 states take 26.72 per cent, while the balance of 20.60 per cent is given to the 774 local governments in the country.
Often time, local governments do not get to receive their 20.60 per cent as some governors ‘seize’ this percentage and may decide to give the local governments a fraction of their allocation.
Governors of states have over the years been the beneficiaries of the SJLGA. They decide what and what not is to be given to local governments, thereby, making them so powerful. Setting up caretakers committees to man affairs of the local council is another means of siphoning money because the committee members are not elected but chosen by governors to whom they are accountable.
Kaigama also said that for the guidelines to see the light of the day, the Central Bank of Nigeria (CBN), Independent Corrupt Practices Commission (ICPC), Economic and Financial Crimes Commission (EFCC) and others should provide the necessary support that will stop governors usurping the power of local government chairmen.
Senate approves, but Governors’ Forum keeps mum
The Senate in its approval to the guideline has called on the State Houses of Assembly yet to approve the constitution alteration bill geared towards granting full autonomy to local governments to do so before the expiration of the Eighth National Assembly.
In a motion sponsored by Aliyu Sabi Abdullahi, senator representing Niger North senatorial district, the Senate expressed concern at the continuous pillage of cash allocated to local councils across the states through the State Joint Local Government Accounts.
The Nigeria Governors Forum has, however, kept mum since the announcement of the new guidelines by the NFIU.