Senate seeks constitution amendment for LG financial autonomy

Tunde Opalana, Abuja

To remove local governments across the country from State controlled financial bondage, the Senate has approved certain measures which include proper amendment of the Constitution to ensure autonomy.

It urged all financial institutions in the country to support the implementation of a new guideline on the operations of the local government accounts titled ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria effective from 1st June, 2019’ issued by the Nigerian Financial Intelligence Unit (NFIU).

The NFIU guideline mandates financial institutions to distribute funds accruable to local governments among the local government councils of that state and not for other purposes.

The guidelines stipulates that “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,”

It also charged various stakeholders like State Houses of Assembly and the Presidency to further support constitutional amendment that will deepen democracy at the local government levels as envisaged in the 1999 Nigerian constitution.

It appealed to state assemblies to fast-track their work on pending constitutional amendments which would give legal backing to local government autonomy.

The Senate reiterated the necessity of the 36 State governments and the Federal Capital Territory to fully support the implementation of the Guidelines to promote good governance at the local government areas and restore governance at the grassroots level.

It as well urged the Federal Government to urgently fund the NFIU which is a creation of the Senate so that it can work to earn the confidence and trust of Nigerians and its international partners.

Senate resolutions were sequel to the adoption of a motion sponsored by Senator Aliyu Sabi Abdullahi (APC, Niger North) which drew attention of Senate to new financial guidelines released by the Nigerian Financial Intelligence Unit (NFIU).

Titled “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June”, the new financial guidelines limit cash transactions in the accounts of local governments to a daily maximum of N500, 000..

Senator Abdullahi said issuance of the new guidelines was prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.

According to him, the NFIU guidelines would reinforce the existence of Local Government as an independent government established by the Constitution at the grassroots level with sovereign and elected officials

The Senate further agreed that the NFlU guidelines do not serve any purpose other than freeing the Financial System from being flooded with cash which criminals use to escape transparency, accountability, and criminal investigation,” he said.

Debating the motion, Deputy Senate President, 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.

Former governors like Senators Adamu Abdullahi, Adamu Aliero, Jonah Jang defended their alleged fairness to local government administration when they held sway as governors.

The former governors said the reforms were overdue and will help free up funds for the development of local governments.

Former Plateau State Governor, Senator Jonah Jang, faulted the motion and suggested it should further be worked upon.

He said: “In some states, the state government takes over the local government funds and abuse it. We have also witnessed local government chairmen signing checks at the beer parlours.

Also contributing to debate, Deputy Majority of Senate, Bala Ibn Na’alla, 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,”

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

However, Senator Ekweremadu cautioned that the position of the Senate that financial institutions should support the implementation of the new guidelines, contravenes Section 162(6&7) of the 1999 Constitution as amended.

He said 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.”

Ekweremadu advised that the position of the Senate must conform with what is permissible in the constitution.

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.

President of the Senate, Bukola Saraki, who presided, urged the standing committees on Anti-Corruption and Financial Crimes; State and Local Governments, to follow up and ensure that positions reached by the Senate are adhered to.

He said the local governments as currently constituted cannot deliver dividends of democracy to the people as long as state governors are in-charge of the funds.