The Nigerian government says it will free local governments’ finances from the control of state governors, describing the move as necessary for grassroots development.
The government said it will achieve this by abolishing state and local governments joint accounts “through constitutional means”.
The Secretary to Government of the Federation (SGF), Boss Mustapha, said this at a conference on Nigerian local governments, organised by SEGNIP Promotions Limited and the Department of State and Local Government Affairs, Office of the Secretary to the Government of the Federation (OSGF).
This is not the first time the government is making similar accusations on the state governments.
Earlier this year, directive to banks to stop transactions on such accounts by the newly established government body, the Nigerian Financial Intelligence Unit (NFIU), met stiff opposition from the governors, leading to at least two law suits.
However, with the latest statement from the SGF, it appears the Buhari administration is poised on going on with its agenda on the local government finances.
Mr Mustapha, who was represented by the Director of Special Duties in the SGF office, David Attah, at the event described the joint accounts as inglorious.
He said the accounts have been grossly abused, leading to major frictions.
The SGF said such abuse gave rise to the agitation for fiscal autonomy of local governments.
He said states have starved local governments of needed funds to discharge their statutory responsibilities as an independent tier of government.
“After so many ruinous years of our recent past, we certainly cannot live with the continued mismanagement of public funds (joint account) any longer.
“Most of us know too well the dangers and consequences of this sustained degradation of our local government system which manifest in increased wave of crimes and social maladies like terrorism, kidnapping, cultism, neighbourhood gangs, human trafficking, baby factories, dilapidated primary schools and primary health facilities, influx of youths to urban centres and pernicious rural poverty which have dovetailed into various dimensions, agitations, and unrests,” he said.
Mr Mustapha linked the starvation of the local governments to the spate of insecurity in the country.
“More so, it is uncanny that most of us fail to see the connection between moribund local governments and Boko Haram insurgency, for instance.
“Suffice to say that no ‘baby factory’ or incidence of kidnapping would find space where local government councillors are fully involved in governance and work with landlords associations and town unions. “In the midst of all these, there is no state, not even one, that showed an example by devising a system that made the local governments work or gave a proper account of the local government funds.
“All of us, directly, or tangentially, are exposed to the impact of local government administration daily. Therefore, mismanagement and mal-administration at this level of governance will connote impacting negatively on our people with direct implication for banishing a large number of the population to abject poverty and penury,” he said.
The SGF said with the introduction of the Nigeria Financial Intelligence Unit (NFIU) Act and the new local government administration account reporting system, the present administration of President Buhari has taken steps to upgrade the anti-graft or money laundering regulations to reduce vulnerabilities created by cash withdrawals from local government funds throughout the country.
Addressing the event, Osun Governor, Isiaka Oyetola, said successive military governments complicated the problems of local councils by investing in them with controversial and unworkable allocation templates and difficult constitutional amendment procedures.
The governor, who was represented by his Chief of Staff, Charles Akintola, said the nation’s local councils have been victims of various forms of government with their attendant challenges from independence to now.
Though Mr Oyetola was not frontal in confronting the position of the SGF, he made strong cases for the maintenance of status quo in which governors control the allocation to the local governments through the joint account.
Tug of War
On May 6, the NFIU issued a directive to commercial institutions via a document it tagged ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria’.
The document sought to ban financial transactions on state/local governments joint account, and placed cap on cash withdrawals from local government accounts in Nigeria.
The guideline immediately drew ire of state governors who opposed the move, describing it as usurpation of their constitutional powers.
The governors accused the NFIU of “stoking mischief and also deliberately seeking to cause disaffection, chaos and overheat the polity.”
However, the Senate backed the NFIU directive at the time, saying it will free the Financial System from being “flooded with cash which criminals use to escape transparency, accountability, and criminal investigation”.
Applications filed before two different courts to stop implementation of the guidelines were refused by the courts.
In May, a suit filed before federal high court in Uyo, the Akwa Ibom state capital, by local government aeas alongside the state government failed to secure injunctions against the guidelines as the judge refused prayers of the applicants.
Another judge, John Tsoho of the federal high court in Abuja declined similar request.