Over two months after the Nigeria Financial Intelligence Unit issued a directive barring state governments from tampering with local government funds, MUDIAGA AFFE reports that many governors have yet to comply
When on May 6, 2019, the Nigeria Financial Intelligence Unit issued the “Guidelines to reduce vulnerabilities created by cash withdrawals from local government funds throughout Nigeria,” there was joy across the country that the long-awaited local government autonomy had finally come.
Going by the guidelines, which became effective on June 1, governors were barred from tampering with the monthly allocations for the local governments from the federation accounts.
But two months down the line, it has emerged that some governors have cleverly devised new means of tampering with the LG funds.
The new tactics employed by the governors appear to be succeeding in states where the chairmen and councillors are caretaker committee members appointed by the governors or those that the governors were instrumental to their emergence.
But for those council areas under the control of the LGA members of staff, because the governors have yet to conduct local government elections, there appears to be some form of resistance, according to investigations.
In Kogi State, for example, an alleged plan by the state government to circumvent the NFIU policy by directing councils to obtain N3bn loan from a bank was resisted.
The state chapter of the opposition Peoples Democratic Party brought the matter to the fore when it accused the Kogi State Government of allegedly meeting with some directors of local governments and head of works department, and directing them to obtain N3bn loan from a bank.
The PDP spokesperson in the state, Bode Ogunmola, alleged that the local governments were directed to tie the N3bn to projects in their domain.
The party, therefore, warned the LGAs to be wary of transactions that negated the NFIU guidelines.
But reacting swiftly to the claims, the Director-General of Media and Publicity to the Governor, Mr Kingsley Fanwo, told SUNDAY PUNCH that the allegation was in the imagination of the PDP, adding that the revenue allocation to the LGAs in the state was grossly inadequate to run the councils.
He said, “Such financial transactions are huge, they cannot be done in secret. I can tell you that we do not have anything to do with local government funds. For a long time, we have not been meddling in the affairs of the council areas because we know that what they get as allocation from the federation account in Kogi State is grossly inadequate to pay staff salaries; that is why they have been paying 45 or 50 per cent for a long while.
“The alleged N3bn loan is not true; it is in the imagination of the PDP and other opposition parties who are using it to stoke sentiment against the state government.”
In Rivers State, a councilor in one of the local government areas, who preferred anonymity, alleged that despite receiving allocations directly from the Federal Government, all the council chairmen still take directives from Governor Nyesom Wike on how the funds are expended.
He claimed that this was so because all the council chairmen were put in office by the governor, adding that by so doing, Wike was still indirectly controlling the council allocations.
He added, “I cannot really tell you exactly how the allocations are disbursed, it is only the chairmen that can tell you that. They (chairmen) always take directives from the governor. They cannot just take decisions on their own because he (the governor) picked them to become chairmen,” he added.
A group, Human and Environmental Development Agenda, had on July 28 called on the NFIU to probe the governments of Lagos and Zamfara states for alleged diversion of local government funds.
The group alleged that Lagos State Government deducted hundreds of millions from local governments’ allocation for June 2019, while on July 9, the Zamfara State chapter of the Association of Local Governments of Nigeria accused the state government of hijacking the statutory allocation due to the 14 councils, through the state’s Ministry of Local Government and Chieftaincy Affairs, for the month of June.
In Cross River State, it was learnt that about N3.7m each was deducted from the June allocation to the 18 LGAs through the state Ministry of Local Government for some unclear purposes.
It was further gathered that the July salaries of council staff members had not been paid because the ministry, ostensibly acting on the orders of the governor, insisted on taking charge of the payment of salaries despite the NFIU directive.
All the 18 LGAs in Cross River State are being run by the Head of Local Government Administration, the civil servants in the council areas because the state government has yet to conduct LG election.
One of the aggrieved HOLGAs, who spoke with one of our correspondents on the condition of anonymity, said, “In Cross River State, salaries of local government staff members have not been paid because some officials in the state Ministry of Local Government involved in the payment of salaries before the NFIU regulation was given have refused to relinquish that duty to the 18 LGAs.
The source said, “Ideally, what was expected was that following the new guidelines, the database of authentic staff members, which the state had been using to pay salaries, should be handed over to the respective Directors of Finance in the LGAs, but the state government has held onto it for their pecuniary benefit.
“At the moment, the state government is surreptitiously making use of the two Head of Local Government Administration in Calabar South and Calabar Municipal councils to coordinate principal officers in the 18 LGAs – namely the directors of General Services and Administration and the directors of Finance and Supply – to flout the directive of the NFIU.
“For instance, in June, these LG officials were compelled to withdraw N2.5m each from the 18 LGAs for what they termed security coverage and another N1.2m each from the 18 LGAs for what they also termed joint services. It is likely that they will continue with the same deductions in July and subsequent months if nothing is done to address the situation.”
He, therefore, called on the Economic and Financial Crimes Commission to invite the two LG officials to explain where the deductions are going to.
But reacting to the allegations, the Chief Press Secretary to Governor Ben Ayade, Mr Christian Ita, said the claims were not true.
“It is not true that local government areas are still being asked to dole out funds. Are you aware that without the state government, the LGAs cannot pay salaries in Cross River? Today as we speak, LG councils in Cross River are indebted to the state government to the tune of over N11bn.
“It is not true that the staff strength of LGAs was bloated. If you check even when the money was not paid directly to the local government councils, Cross River went about unbundling the payment of salaries to LGs staff. That was why we needed to carry out a verification exercise where each worker is now specifically paid directly by the LG instead of the centralised system that we had before the new policy.”
Worried over the development, the national leadership of the Nigeria Union of Local Government Employees had in a letter with Ref NULGE 26/Vol.TV/164, directed all council chairmen, treasurers 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.
However, the Executive Chairman, Centre for Anti-Corruption and Open Leadership, Mr Debo Adeniran, blamed the regulatory agencies, in this case, the Central Bank of Nigeria, for the failure to implement the government policy.
He said, “The problem we have is not about policy enactment, it is about the government developing the political will to implement its own rules. Before now, we ought to have separation of power which should bring about checks and balances but it has not been allowed to work.
“The agencies that are supposed to implement the rules and regulations as enshrined in the constitution are reluctant to implement those rules and regulations because they would not know what the reactions of their bosses would be and that is what is affecting the NFIU.
“The NFIU was more active when it was with the EFCC in monitoring lodgement and withdrawals from banks. But since it was taken to the Central Bank of Nigeria, things have changed. The CBN also has the duty to superintend over the FSRCC (Financial Services Regulatory Coordinating Committee).
YOU MAY ALSO LIKE: school-cults-lagos-subeb-seeks-lnscs-help
He added, “This non-compliance with the NFIU guideline is what the Central Bank of Nigeria would have solved and if they are not solving it, nobody would solve it. You know the governors fought relentlessly to ensure that there was no autonomy for the LGAs because they enjoy the unearned benefit from JAAC, but I wonder what they would have done if their own account is tied to that of the Federal Government.
“So, I believe that it is the NFIU that is not performing its duty effectively going by the dictates of the Act establishing it. If the head of NFIU is not ready to act, they should change him. The LGAs should mount pressure on the CBN to ensure that the rules were implemented. Without this, we would still continue to lament the non-performance of the LGAs and they would have ready-made answers on why they are not performing.”
Also, a Senior Advocate of Nigeria, Chief Mba Ukweni, blamed the governors for holding on to council funds despite the NFIU directive.
Ukweni said, “Why the governors are insisting on holding onto the LGAs funds is largely out of selfishness. They make use of the funds and because that is so, most of them find it difficult to conduct local government elections. In Cross River State for instance, since Governor Ben Ayade became governor, he has not conducted LGA elections and this is unconstitutional.
“If the President decides to hold on to states’ funds, the whole country will hear it. The constitution has created three tiers of government, we cannot change that. We have the federal, state and local government. These three tiers have constitutional backing to operate independently. Those allocations are meant for the LGAs, not for state governments. The allocation meant for states are given to them directly. So, it is out of sheer selfishness for state governors to continue to tamper with LGA funds after decisions have been taken.”
He suggested that the LGA funds should no longer be released into the JAAC account.
“It should strictly be sent to the LGAs. Once state governors no longer have access to any joint account, they will stop. Besides, there must always be in place a democratically elected government and monies released to them. It is only then that you will see the governors agitating to conduct elections,” Ukweni added.
However, the President of Nigeria Voters Assembly, Mr Mashood Erubami, said the governors were still tampering with council allocations because there was no strict monitoring by the regulatory authority.
He said, “The governors are only still doing what they are doing because there is no strict enforcement. They (the governors) saw the LGAs funds as free money over the years and they do not want to relinquish it.
“One of the ways it could be checked is to ensure that the leadership of LGs are democratically elected. If this is done, the governors will refrain from doing what they are doing at the moment.”-PUNCH