State Governors

The Federal Government on Monday stopped the state governments from seizing local government allocations, according to the new guidelines of the Nigerian Financial Intelligence Unit (NFIU).

The government set June 1, 2019, as the take-off date for the new order, making it compulsory for all local council allocations to go straight to their respective bank accounts.

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The guidelines would make the joint account system currently in use only exist for the receipt of allocations from the federation account but not for disbursement.

Concise News learned that the new measures were introduced by the current administration to restore LGA’s financial autonomy.

This comes less than a year after President Muhammadu Buhari signed the NFIU bill into law, thus separating the agency from the Economic and Financial Crimes Commission (EFCC).

The new guidelines were introduced to check treasury looting by local government officials as well as alleged diversion of LGA funds by governors.

The new measures would place a daily cash transaction limit of N500,000 for each of the LGAs, while these would be registered and monitored by the NFIU through e-payment module.

The notice entitled, “Guidelines To Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria, Effective 1st June, 2019,” is said to have been prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.

The NFIU warned banks to comply with immediate effect, threatening to sanction any bank that flouts the order.

The agency said: “The NFIU requests all financial institutions, other relevant stakeholders, public servants and the entire citizenry to ensure full compliance with the provisions of the guidelines already submitted to financial institutions and relevant enforcement agencies, including full enforcement of corresponding sanctions against violations from June 1, 2019.

“Having realized through analysis that cash withdrawal and transactions of the State, Joint Local Government Accounts (SJLGA), poses biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole, the NFIU decided to uphold the full provisions of Section 162 (6) (8)of the 1999 Nigerian Constitution as amended, which designated “ State Joint Local Government Account into which shall be paid allocations to the local government councils of the state from the federation account and from the government of the state.

“The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state” and not for other purposes.

“As far as the NFIU is concerned, the responsibility of the account as a collection account is fully reinstated.

“In addition, taking such measures was necessitated by prompting reasons on the NFIU to respond to threats of isolating the entire Nigerian financial system by other international financial systems because of deficiencies in our anti-money laundering and counter-terrorism financing implementation.

“The complete guidelines have been released to the governor of the Central Bank of Nigeria, the Chairman, Economic and Financial Crimes Commission (EFCC), the Chairman, Independent Corrupt Practices Commission (ICPC) and Chief Executive Officers of all banks and other financial institutions.

“Any state government that is willing to seek any expert economic advice in the unlikely event of these guidelines constituting an inconvenience to the management of the state can work with the NFIU and /or CBN.”