LG Funds: Amidst complaint by governors, court refuses to stop NFIU directive

Court Symbol
Court Symbol

A Federal High Court, Uyo, has declined to grant a request of the Akwa Ibom State Government to stop the implementation of the guidelines on local government funds issued recently by the Nigerian Financial Intelligence Unit (NFIU).

PREMIUM TIMES reported how the NFIU on May 6 issued the ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria.’

The guideline mandates that state and local government joint accounts be operated solely as transit accounts from which funds will be distributed directly to the accounts of the local governments.

Banks were directed to ensure the full implementation of the guidelines with effect from June 1.

The guideline will, in effect, ensure that the common practice of governors having sole authority over monies meant for local governments is stopped.

Governors have vowed to stop the guidelines from being implemented and have written to President Muhammadu Buhari to intervene.

The president is yet to comment on the matter.

In reaction to the directive, all the local governments in Akwa Ibom State, alongside the state government through the attorney-general of the state, approached the Uyo Division of the Federal High Court seeking to nullify the guidelines.

The suit filed against the NFIU has the reference number FHC/UY/CS/88/2019.

The plaintiffs, who were represented by the state’s attorney-general, Uwem Nwoko, also urged the court to grant a restraining order against the NFIU stopping the commencement of the guidelines on June 1.

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On Friday, Arthur Obi-Okafor, who represented the NFIU, challenged the right of the plaintiffs to file the suit. He urged the court not to grant any order “in favour of persons who are nothing but busybodies.”

He informed the court that the matter is of grave national security concern and that the urgency raised by the plaintiffs is self-induced since the guidelines were released on May 6.

The judge, A. Okeke, refused to grant the restraining order and adjourned the matter to June 21.

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