The dispute over the management of local government allocation resurfaced in a recent meeting of the 36 state governors in Abuja, CHIBUZO UKAIBE writes.
Last Wednesday’s meeting of the 36 state governors in Abuja was instructive. The posture of their financial strength has never been more under threat than now, no thanks to the insistence of the Nigerian Financial Intelligent Unit (NFIU) to ensure financial autonomy for local governments.
Under the guise of the joint account system, the state governors have been controlling the federal allocation for the local government. While state governors have been accused of illegally managing the funds belonging to the local government, pundits aver that the financial system in the state has remained a major tool with which they dominate the political space in the state.
What’s more, the refusal of governors to cause for the conduct local government polls in states, preferring instead to appoint caretaker committee chairmen, has also been linked to the governors desire to retain firm grip of the political and financial levels in their states.
As such debates about whether the councils should be recognised as a tier of government had resonated for a while.
But NFIU’s move to monitor the finances of states and local government is causing unease within the ranks of the governors just as it is beginning to embolden local government chairmen to be in charge of their allocation.
The guideline prevents state governments from making withdrawals from local governments’ funds. The new guideline also 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,” the NFIU statement read.
To drive home the point, NFIU had warned that local government chairmen would be held responsible if they continue to handover their allocation to governors to manage.
The directive had attracted different reactions from legal experts. Former President of Nigeria Bar Association, (NBA) Olisa Agbakoba, SAN, had said “The role of NFIU is very wide but I do not think that part of that role is to monitor the disbursement of funds meant for local governments. The governor is absolutely right in asking the president to caution NFIU with regards to how funds meant for local government should be disbursed.”
But a former 2nd Vice-President NBA, Monday Ubani argued that “The governors are not right in their observations because they have been stealing the money that belongs to local governments and Nigerians have kept quiet. I want Nigerians and the National Assembly to support the NFIU in this directive to save Nigeria.
“Nigerians are leaving the country due to mismanagement of funds and now that something is being done about it, some people are crying foul. The President should warn the governors. The Governors have no moral right to ask the President to caution the NFIU. What the NFIU is doing is commendable and must be encouraged.”
Expectedly, the governors kicked against the move. But their protest letter to the President for the directive to be stopped was countered by a letter from an emboldened National Union of Local Government Employees (NULGE) which asked the president to ignore the governors.
Although the directive took effect in June, the only open friction over the payment of such funds was recorded in Zamfara State. Zamfara State Government and the 14 local governments’ chairmen of the state over the non-release of federal allocations to the local governments for this month.
Briefing newsmen in Gusau on Monday, the spokesman for the 14 local governments’ chairmen, Ahmed Maradun, said they would not comply with what the state government wanted to do with their federal allocations, stressing that the constitution has stipulated that local governments’ statutory allocations should go directly to local governments’ chairmen.
Ahmed claimed that when the allocation for this month was released from the federation account, the Zamfara State Government directed that each local government would be given the sum of N5m each while the balance would be withheld by the state government.
“Our thinking was that the state government would abide by the constitutional provision and allow our money to come directly to our accounts but very unfortunately, the state government is holding our money.”
He argued that the state government had no right to hold their federal allocations since the joint accounts formula had been scrapped.
While the Zamfara matter seemed to fade out amid insinuations of an amicable resolution, NFIU‘s recent declaration that NULGE had reported state governors who had been stealing local governments’ funds indicated that the local governments are not ready to back down over the matter.
Also, NULGE has written a letter on August 9 to all the nation’s 774 local governments’ chairmen on August 9 to alert them to the fact that the governors might be planning fresh tactics to steal the LG funds.
It warned the council bosses and workers against helping the governors to steal the LGs’ money.
The National President of NULGE, Ibrahim Khaleel, was quoted as saying that state governments had come up with another means of siphoning money from the local governments’ accounts despite the NFIU financial guidelines.
Khaleel accused the state governments across the country of forcing local governments to pay levies to them from the fund apportioned to the councils from the federation account.
He said local governments were being asked to contribute to the running of some projects in states which ordinarily were the responsibilities of state governments.
However, the emergence of a letter written by NULGE to all council chairmen was also insightful.
The letter, dated August 9, 2019, was signed by Khaleel, the union’s General Secretary, Agunoye Chukwuemeke; and the National Treasurer, Ambali Olatunji.
The letter, with Ref NULGE 26/Vol.TV/164, directed all council chairmen, treasurers of the councils and directors of general services and administration to be cautious in carrying out directives from state governors to transfer LGs’ funds to state governments’ agencies.
The letter stated, “While we have not relented in the struggle to achieve autonomy for the system we operate through constitutional means, we are however encouraged by the content of the NFIU recent guidelines with respect to the operation of the state-local governments’ joint accounts.
“Given the passion with which the Nigeria Governors’ Forum had opposed this initiative, it is clear to us in NULGE that they will go to any length to either bend these guidelines or find ways of administratively/bureaucratically undermining them.
“In other words, from their pronouncements and action, our state governors are still determined to continue the looting of local governments’ resources with their stranglehold on these joint accounts.
“It is with respect to the above context that we wish to use this opportunity to caution the leadership of councils, particularly chairmen, treasurers and directors, general services and administration to exercise a high degree of restraint in carrying out directives of state governors in releasing any fund whatsoever through the back channels to organisations or agencies of state governments.”
But rising from their meeting on Wednesday, governors said they were exploring other options on the NFIU directive that they should not tamper with funds accruing to the local governments from the Federation Account.
The chairman of the NGF and Ekiti State governor, Dr. Kayode Fayemi, when asked on the governors’ next line of action regarding the NFIU guideline said, “We are in court and we are exploring other options”.
A political analyst, Mike Obiekwe, however noted that the local government allocation issue is steeped in the politics of whittling the overbearing influence of the governors on the one hand and the need to ensure that development gets to the grassroots.
“Beyond the political impact of whittling the over bearing influence of governors in the state, I want to believe that the directive if complied with will help to ensure that development gets to the masses at the lowest level.
“Often times, we are too focused on what the federal government isn’t doing and forget to ask what the governors are doing to compliment the seeming little efforts the federal government is doing.
“So we need to change that narrative if this directive will help to address that it will be most welcome. However, we need to caution that the excuses for which the state government took over the running of the local government account should not repeat itself.”
The failure of local government which was responsible for the payment of primary school teachers to meet its obligation had seen teachers back the decision of state governments take up the responsibility. The local government chairmen at the time were also accused of abandoning their posts for lavish life styles in state capitals.
But other analysts aver that the political rivalry between the governors and local government chairman shortly after 1999 had seen to a strategic emasculation of their political influence in the buildup to 2003 election, through the joint account arrangement.
On his part however, Samuel Imade notes, “It’s not enough for the NFIU to issue the directive but it is whether the local government chairmen will be bold enough to demand their right. We need to hold these governors to account on how they manage our resources.”
