Governors lose battle to stop NFIU’s guidelines on States/LGs account

 

ABUJA, Nigeria – Governors of the 36 states of the federation have  lost in their quest to stop the Nigerian Financial Intelligence Unit (NFIU) from implementing it guidelines on State/Local Government account which limits daily withdrawal from the Joint Account.

Justice Inyang Ekwo of the Federal High Court ruled in favour of local governments,  dismissing the suit filed to that effect by the 36 states, through their Attorneys General and the Nigeria Governors’ Forum (NGF).

The states, in the suit marked: FHC/ABJ/CS/563/2019, challenged the legality of the Nigerian Financial Intelligence Unit (NFIU) Guidelines, which came into effect on June 1, 2019.

The NFIU had in the guidelines, which also limit daily cash withdrawal from the State/LG joint account to N500,000  claimed the measures 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 are Attorney General of the Federation (AGF), the NFIU and the Nigeria Union of Local Government Employees (NULGE).

The NGF  argued among others that  the NFIU guidelines: known as “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.

Justice Inyang Ekwo held that he is unable to see where the guidelines contradict the provisions of sections 7(1), (6) (a) and (b) of the Constitution.

Ekwo is of the view 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.

Reacting to the development, Director/CEO of NFIU, Mr Modibbo Tukur said the judgment is good because the Federal government is always ready to protect both states and local governments by making funds available for their governance responsibility.

He stressed that funds can now be decided on by local councils which can be channeled to improve local security. “From this judgment and from today all transactions on Local Government funds will be disclosed to ICPC and EFCC 100% and will be reported continuously”, he said.