Governors of the 36 states are kicking against a move by the Nigerian Financial Intelligence Unit (NFIU) to regulate the running of states and local governments’ joint accounts. TAIYE ODEWALEreports.
Although the Nigerian Financial Intelligence Unit (NFIU) has been a unit in the Economic and Financial Crimes Commission (EFCC) over the years but a bill which made it an independent body on its own, was passed into law by the 8th National Assembly on Wednesday, March 7, 2018 and signed into law by President Muhammadu Buhari on Thursday, July 12, 2018.
NFIU as police
By provisions of its Act, NFIU is saddled with the functions of ensuring transparency and accountability in financial transactions amongst the three tiers of government i.e, the federal, state and local government councils particularly the management of the states and local government joint accounts.
The agency is by provisions of its Act, the Nigerian arm of the global financial intelligence unit created in compliance with international standards on combating money laundering, financing of terrorism and checking suspicious transactions.
NFIU’s establishment is sequel to the requirements of recommendation 29 of the Financial Action Task Force Standards and Article 14 of the United Nations Convention Against Corruption.
It is empowered to receive currency transactions reports, suspicious transactions reports, currency declaration reports and other information relating to money laundering and terrorist financing activities from financial institutions and designated non-financial institution.
Provisions of its act also mandate it to receive reports on cross-border movement of currency and monetary instruments, maintain a comprehensive financial intelligence database for information collection, analysis and exchange with counterpart Financial Intelligence Units (FIUs) and law enforcement agencies around the world.
NFIU’s guideline gets legal teeth
Apparently being its creation and in making it function effectively the 8th Senate on Wednesday, May 8, 2019 passed resolutions in support of its operational guidelines.
NFIU’s new guideline mandates financial institutions to distribute funds accruable to local governments among the local government councils of that state and not for other purposes.
“With effect from June 1, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, locally and internationally.
“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000 per day,”
Senate in its resolutions which were sequel to a motion sponsored to that effect by Senator Aliyu Sabi Abdullahi (APC Niger North), pointed at the need for financial autonomy for the 774 local government councils.
The upper legislative chamber in the resolutions slammed state governors for mismanagement of state/lgs joint accounts as provided for in the 1999 constitution.
But during debate on the motion, the then Deputy President of the Senate, Ike Ekweremadu and chairman of Senate Committee on Constitution Review, urged the Senate to liaise with the NFIU to ensure that the guidelines do not contradict with any part of the constitution.
He appealed to state assemblies to fast-track their work on pending constitutional amendments which would give legal backing to local government autonomy.
He cautioned that the position of the Senate that financial institutions should support the implementation of the new guidelines, contravenes Section162(6&7) of the 1999 constitution as amended.
Section 162(6&7) states that “Each State shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the local government councils of the state from the Federation Account and from the government of the state;
“Each state shall pay to local government councils in its area of jurisdiction such proportion of its total revenue on such terms and in such manner as may be prescribed by the National Assembly”, he said.
He warned that if any section of the constitution is flouted, governors may challenge the move in court. He said the best option was to amend the various sections of the constitution to grant full autonomy to local governments.
Governors head to court
Little wonder that three months after, precisely last week, the 36 states governors resolved to approach the court on constitutionality or otherwise of the operational guidelines of NFIU particularly as regards the management of the states and local government joint accounts.
Specifically, the governors made their rejection on the policy known on Thursday last week, August 22, 2019, when they met in Abuja over the local government’s allocations from the federation account.
According to them, the NFIU Act 2018 does not have the power to say how local government finances should be used let alone, imposing sanctions. The governors as disclosed by an insider, resorted to court action when efforts made by them for an intervention from the presidency failed.
According to the source, “All the governors have resolved that we should take the battle to the court for a clear cut decision which will guide the present generation of governors and their successors.
“We want the court to interpret Section 7(6) (a) and (b) and Section 162(6), (7), and (8) of the constitution.
“If you look at Section 7(6) (a) and (b) of the constitution, it gives the National Assembly and the State House of Assembly the powers to make provisions for statutory allocation of public revenue to the local councils in the federation and within the state respectfully…
“We see the whole matter as constitutional; we prefer to go to court instead of sleeping over our rights. The guidelines of the intelligence unit as far as we, the governors, are concerned, are very much illegal, unconstitutional and cannot be binding on us.
“Some of us tried as much as possible to prevail on the presidency to broker peace between the Governors’ Forum and the NFIU, but the latter was not forthcoming.
“At our meeting, we realized that we have a strong case. We will fight to the end. The beauty of democracy is that the judiciary is the arbiter”.
Obviously, the decision of the governors to approach the court on NFIU’s operational guidelines will help in deepening the practice of constitutional democracy in the country.
We see the whole matter as constitutional; we prefer to go to court instead of sleeping over our rights. The guidelines of the intelligence unit as far as we, the governors, are concerned, are very much illegal, unconstitutional and cannot be binding on us.