Autonomy: Senate backs new guidelines on LG operations

The Nigerian Senate on Wednesday backed the new financial guidelines issued by the Nigerian Financial Intelligence Unit (NFIU) on the operations of local government accounts.


The NFIU, domiciled with the Central Bank of Nigeria (CBN), issued the new financial guideline titled “Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria effective 1st June 2019” on Monday.


The guidelines stated that joint account system in place in most states will only exist for the receipt of allocations but not disbursement.


Specifically the guidelines provide that the State Joint Local Government Account is only a collection account of funds to be shared to only Local Government Accounts in accordance with Section 162 (7) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and not for any other transactions or purpose.



The guidelines also will limit cash transactions in the accounts of local governments to it daily maximum of 500,000 naira only and subsequent withdrawals must be by approved Cheques or electronic payment channels to promote registered transactions by all the local governments.


Senator Aliyu Sabi Abdullahi (Niger North), presenting a motion on the development, noted that issuance of the new guidelines is prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.


He recalled that due to lack of autonomous status for the NFIU before and the alleged interferences with its operations by the EFCC, the Egmont Group had suspended Nigeria’s membership of the body in February 2017.


The Egmont Group is a global body of 155 financial intelligence units across the world which facilitates the exchange of financial intelligence, expertise and capability.


Senator Aliyu said the Federal Government was alarmed by the continuous pillage of cash allocated to local councils across the states by state government through the State Joint Local Government Accounts and the stark reality of poor governance at the grassroots third tier of government and its attendant role in the challenges of poverty, unemployment, rural banditry, kidnapping and other social vices.


Supporting the motion, Senator Ibn Na’Allah said, “If we succeed in executing this, 60% of corruption in Nigeria will be resolved. This will be a major landmark if the Senate decides to follow through its resolutions”.


“I support this motion and i urge my colleagues to do the same because it  will boost the efficiency of local government governace in elevating poverty,” Senator Adamu Aliero said.


Senator George Akume said, “The time of Local Government governace has come and I believe we should come to their rescue to save them from the shackles of the state Governors”.


According to Senate President Bukola Saraki, “This is a very important Motion that addresses two things. First of all, we talked about the Local Government administration, which has been an issue of great concern.


“For some of us that have had the opportunities to be Governors and also Legislators, it is clear that a few bad eggs tend to give the system a bad name. Apart from all this, there must be an interface between National Assembly and the Governors.


“We should allow LGAs have the autonomy. I think it is important because it is clear that this is affecting the local governments administration. So, I hope that State Assemblies would be able to make the necessary arrangements but it would require working with the Governors.


“I think it is time the governors allow this to happen. We have been trying for a long time, clearly it is not working. It is better to try the full autonomy of the Local Governments and see how it works.


“I remember when we started this process, it took a lot of courage to push it through and we can now see the benefit in both the private sector with the international community now lifting suspensions. We are now beginning to see the value of the local and state administration.


“So, I would like to commend the NIFU to continue along these lines to ensure that there is a more transparent way of administration at all levels. I thank Sen. Aliyu Sabi for this. And the committee on Anti Corruption.


“Let all financial institutions agree, and all of us agree that we must follow these guidelines and let the local governments be autonomous”.


The Senate thereafter urged the NFIU and all financial institutions to support implementation of the new guidelines with diligence and professionalism, while also urging the federal government to urgently fund operations of the new NFIU so that they can work to earn the confidence and trust of Nigerians and it’s international partners.


The Senate also urged the 36 State Governments to fully support the implementation of the new NFIU guidelines to promote good governance at the local government areas and restore governance at the grassroots levels.