Nigerian governors have lost the battle over the financial autonomy from the Local Government Joint Account.
Justice Inyang Ekwo of the Federal High Court delivered the ruling on Monday in favour of the Federal Government and the Nigerian Financial Intelligence Unit (NFIU).
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 guideline, which was on money laundering risk and vulnerabilities, advised all banks not to honour transactions from joint accounts.
It also reduced cash withdrawal from local government accounts to N500,000 daily.
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The guideline further directed that the states/local governments’ joint accounts should be used only for receiving funds and subsequently transferring them to local government accounts only.
However, the Nigerian Governors Forum sued the FG and NFIU for interfering with state government powers to initiate transactions on Local Government Joint accounts citing provisions of the 1999 constitution.
In 2019, NGF approached a federal high court presided over by Chief Judge of the federal high court to stop the NFIU’s guidelines from being implemented, but he declined the request.
Another federal judge in Uyo, Akwa Ibom state, reportedly refused to restrain NFIU from pushing through with the guidelines.
The judgement given by Justice Ekwo is also coming months after the National Assembly passed a bill seeking to grant financial autonomy to local government councils in the country.
Reacting to the judgement, the Director/CEO of NFIU, Mr Modibbo Tukur, said the judgement is good because the Federal government is always ready to protect both states and local governments by making funds available for their governance responsibility.
He stressed that funds can now be decided on by local councils which can be channelled to improve local security.
The CEO of NFIU stated that “from this judgement and from today all transactions on Local Government funds will be disclosed to ICPC and EFCC 100% and will be reported continuously.”
