Nigeria’s 36 state governors on Monday lost their opposition to efforts by the Federal Government to monitor and guarantee financial autonomy for local governments in the country. In a ruling on the application by the States, Justice Inyang Ekwo of the Federal High Court in Abuja dismissed the suit filed by the states, through their Attorneys General and the Nigeria Governors’ Forum (NGF).
In the suit marked: FHC/ABJ/CS/563/2019, the States had challenged the legality of the Nigerian Financial Intelligence Unit (NFIU) Guidelines, which came into effect on June 1, 2019. But in his ruling, Justice Ekwo ruled that the suit lacked merit. The Court held that the regulations were designed to ensure that funds meant for local governments are paid directly to them, rather than through a joint account controlled by governors.
Justice Ekwo also argued that the provisions of the NFIU’s guidelines were not in conflict with 1999 Constitution, as amended. Among other things, the NFIU 2019 guidelines required that the States/Local Governments Joint Accounts should be used only for receiving funds and subsequently transferring them to Local government accounts only.
According to the NFIU, the guidelines, which also limit daily cash withdrawal from the State/LG joint account to N500,000, are intended to reduce “crime vulnerabilities created by cash withdrawal from local government funds throughout Nigeria effective from June 1, 2019.” Defendants in the suit included the Attorney General of the Federation (AGF), the NFIU, and the Nigeria Union of Local Government Employees (NULGE).
The States had argued that the NFIU guidelines, titled “the NFIU Enforcement and Guidelines to Reduce Crime Vulnerabilities Crafted by Cash Withdrawal From Local Government Funds Throughout Nigeria,” particularly provisions 1 to 6 and the penalties prescribed, are ultra vires the power of the NFIU under Sections 3 (1) and 23(2) (a) of the Nigerian Financial Intelligent Unit Act, 2018 and therefore unconstitutional.
But in his judgment, Justice Ekwo held that he was unable to see the contradictions between the guidelines and the provisions of sections 7(1), (6) (a) and (b) of the Constitution. Similarly, he added that the guidelines also did not conflict with the provision of Section 162(6) of the Constitution, which creates the State Joint Local Government Account, into which allocations to the Local Government Councils of the state from the Federation Account and from the government of the state are paid.
According to him, the guidelines did not contradict Section 162(8) of the constitution which prescribed that the amount standing to the credit of the local government council of the state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.
Arguing further, the Judge added that the provisions of the NFIU guidelines also do not contradict the provisions of the 4th Schedule to the 1999 Constitution which prescribes the functions of a Local Government Council. “On the whole, I see the provisions of the guidelines of the 2nd defendant as seeking to direct the monitoring of accounts, transfers and any other means of payment or transfer of funds of local government councils as provided for in Section 3 (1) (r) of the Act of the NFIU,” he said. “It only limits cash withdrawal made from any Local Government Account anywhere in the country to amount not exceeding N500,000.00 (Five Hundred Thousand Naira) per day. “Any amount higher than that can be done using other methods of banking transaction save cash.
“Unless it can be shown that there is any provision of the 1999 Constitution (as amended) which these provisions of the 2nd defendant’s guidelines have contradicted or conflicted directly and practically, then the issue of unconstitutionality cannot be said to arise.”
“I also find that the case of the plaintiffs has not been established and I so hold.
“I find, in the end, that the case of the plaintiffs lacks merit and ought to be dismissed and it is hereby dismissed,” the judge said.
(Source: Huhuonline)
