Court stops governors from withdrawing LG funds

A Federal High Court sitting in Abuja, on Monday, asked the 36 State governors in the country to comply with a directive issued by the Nigerian Financial Intelligence Unit (NFIU) restraining them from withdrawing funds from local government accounts.

The anti-graft agency had in 2019 issued a directive and guidelines on the withdrawal of funds allocated to the 774 Local Government Areas recognized by the country’s 1999 constitution.

• Drama as senator who lost reelection ticket storms out of primaries venue
• 2023: Wike, Makinde, Ortom in closed-door meeting with Obasanjo

The NFIU’s director, Modibbo Tukur, while issuing the guidelines, had explained that the directive was aimed at curbing crime vulnerabilities created by cash withdrawals from local government accounts by state governments.

Tukur stressed that the guideline became imperative considering money laundering risks and vulnerabilities, cautioning all banks not to honour transactions from joint accounts.

The NFIU’s boss also directed that the States/Local Governments Joint Accounts should be used only for receiving funds and subsequently transferring them to local government accounts only.

But a few days after the directive, the State governors under the aegis of the Nigeria Governors’ Forum (NGF) dragged the NFIU to court.

The governors, while citing provisions of the 1999 constitution, argued that the federal government and the NFIU should be restrained from interfering with the state government’s powers to initiate transactions on LG joint accounts.

But Justice Inyang Ekw of the Federal High Court, according to a statement by NFIU’s spokesman, Ahmed Dikko, ruled that the State governors had no locus standi to spend funds allocated to Local Government Areas since there are three tiers of government.

Reacting to the judgement, Tukur described the judgement as a good development, noting that the federal government is always ready to protect both states and local governments by making funds available for their governance responsibility.

He stressed further that funds can now be decided on by local councils which can be channelled to improve local security.

”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,” Tukur said.