Towards Financial Autonomy For Local Governments

Towards Financial Autonomy For Local Governments

A giant leap towards ensuring the autonomy of local governments’ administration and full-fledged federal system of government in Nigeria was recently taken with the Nigerian Financial Intelligence Unit new guidelines technically barring state governments from tampering with local governments’ allocation. The directive which is expected to commence operation on June 1 will no doubt protect the financial integrity of expenditure, fight corruption and address money laundering challenges at the local government level.

 A statement from NFIU stated that with effect from June 1, any bank that allows any transaction from any local government account without the funds first reaching a particular local government account will be sanctioned locally and internationally. Also, there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500, 000 per day; any other transactions must be done through valid cheques or electronic funds transfer.

WITH the NFIU’s directives, the Joint Account System put in place by the state will only exist for the receipt of allocations but not disbursement. All financial transactions by local governments will be registered and monitored by the NFIU through e-payment module.

WE note that for years, some state governors have turned most local councils in their states into their fiefdom, thereby using funds meant for the development of the area the way they liked and willfully neglected the development of the third tier of government.

THE local councils are the third tier of government in the country. They are guaranteed by section 7 of the 1999 constitution of Nigeria. The councils which ideally are expected to be nearer to the grassroots have unfortunately not lived up to expectations.

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REASON being that most states Governors in the country have held them by the jugular. For instance, governors see local government fund as slush money and do whatever pleases them without budgetary provision.

ALSO some of them even starve local government of the needed fund for their survival. This is achieved through the joint State-Local government account. The stronghold which states got over the local governments is traceable to section 7(1) of the constitution which provides as follows:

“THE state government shall by all provide for the establishment, structure, composition finance and function of the local councils in the state.”

THE above provision essentially provides state governors the opportunity to deny most local governments the needed autonomy to function optimally. The chairmen, no doubt, will do virtually everything allowing state governors to have their way all in a bid to keep their jobs.

THE NFIU’s action must have been prompted by the misappropriation of the funds allocated to the local councils by the state governments through the State Joint Local Government Accounts (SJLGA). The NFIU’s action was also necessitated by the threats from international financial watchdogs to sanction Nigeria as a result of abuse of the local governments’ funds.

WE therefore welcome this latest move to empower the local council and make them perform their constitutional duties. Our position is that developments would get quickly to the rural areas if monies meant for the councils get to them and are judiciously utilized for the good people living in such locality.

EXPECTEDLY, state governors have kicked against the directive, threatening to seek redress at the law court. A statement signed by the Chairman of Nigeria Governors Forum, Abdulaziz Shetima enthused that NFIU Act 2018 negated sections 7(6)(a)and(b),162(b), 176(7) of 1999 constitution of Nigeria( as amended) .

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WE canvass for a constitutional amendment to the provision of the constitution which vests the supervisory powers of the local government on the state governments. Anything less would be tantamount to begging the question. Amending section 7 of the constitution would ultimately give full autonomy to the local governments.

WE also call for the democratization of the local government. Most states do not have elected officers as heads of the councils.

Towards Financial Autonomy For Local Governments

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