The Federal High Court on Monday declined to restrain the Nigerian Financial Intelligence Unit (NFIU) from implementing its recent guidelines on local government funds.
The judgment by John Tsoho of the Abuja Division marked 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.
The Nigeria Governors Forum (NGF) recently sued the NFIU, 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.
At the resumed hearing on the matter on Monday, Mr Tsoho 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 on excuses that he was handling another matter at the Presidential Election Petitions Tribunal.
Although there was an initial agreement by all parties to wait for Mr 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 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.