Governors to know fate May 23 in suit challenging regulation of LG spending
A Federal High Court (FHC), Abuja, on Wednesday, fixed May 23 for judgment in a suit filed by the 36 states’ Attorneys-General challenging the Nigerian Financial Intelligence Unit (NFIU) from implementing its guidelines on local government LG spending.
Justice Inyang Ekwo fixed the date after counsel to the parties in the suit presented their arguments and adopted their processes.
The News Agency of Nigeria (NAN) had, on May 6, 2019, reported that the NFIU had issued guidelines to stimulate the reduction of crime vulnerabilities created by cash withdrawals from local government funds across the country, beginning from June 1, 2019.
The guidelines, the agency said, include full enforcement of corresponding sanctions against violations.
The guidelines limited the cumulative amount that can be withdrawn from a local government account to not more than N500,000 daily.
It also directed that any other transaction must be done through valid cheques or electronic funds transfer, among others.
It said that cash withdrawal and transactions from State Joint Local Government Accounts (SJLGA) “posed biggest corruption, money laundering and security threats at the grassroots and to entire financial system and the country.”
But the state governments had dragged the Attorney-General of the Federation (AGF), the NFIU and the Nigeria Union of Local Government Employees (NULGE) to court as 1st to 3rd defendants respectively.
The plaintiffs (state governments) argued that such directive was in breach of financial autonomy as enshrined in the Nigerian constitution.
Reacting, counsel for the AGF, Tijjani Gazali, SAN, said the NFIU had not encroached on the powers of the states or local governments.
Gazali, acting Director, Civil Appeals at the Federal Ministry of Justice, prayed the court to dismiss the plaintiffs’ suit for lacking in merit.
“There is nothing wrong or unconstitutional about the NFIU guidelines as they do not usurp the powers of the plaintiffs,” he said.
According to him, it is clear from the provisions of the NFIU Act, especially Section 23 (2) (a) and Section 28 (2) and Section 31 of the NFIU Act, that the unit has the power to make the guidelines.
He disagreed with the submission of the plaintiffs’ lawyer, Omonsoya Popoola, that the NFIU guidelines were not consistent with the provisions of Section 162 of the constitution.
“We urge the court to hold that the plaintiffs have failed woefully to prove their case and to dismiss it with heavy cost,” he said.
Similarly, counsel for the NFIU, Arthur Okafor, SAN, said the agency acted within its statutory powers to prevent abuse of office and other forms of financial crimes that might arise at the local government level.
NAN reports that there had been calls for financial autonomy at the grassroots due to the overbearing control of state governors on the local councils where federal allocations are lodged.
It would be recalled that in 2019, the Nigerian Governors Forum (NGF) had approached the FHC presided over by Justice John Tsoho to stop the NFIU’s guidelines from being implemented, but the court declined the request.
Also, another FHC Judge in Uyo, Akwa-Ibom, refused to restrain the NFIU from implementing its guidelines.(NAN)