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LG financial autonomy: FG, NFIU win case against governors

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 LG financial autonomy FG NFIU win case against governors

The Federal High Court sitting in Abuja, on Monday, dismissed a suit that Governors of the 36 States of the Federation, filed to query the constitutionality of regulations the Nigerian Financial Intelligence Unit, NFIU, issued to guarantee financial autonomy for local governments.

The court, in a judgement that was delivered by Justice Inyang Ekwo, held that the suit lacked merit.

It held that the regulations which came to effect on June 1, 2019, was aimed to ensure that funds meant for local governments are paid directly to them, rather than through a joint account controlled by governors.

Besides, Justice Ekwo stressed that provisions of the NFIU’s guidelines, were not in conflict with 1999 Constitution, as amended.

It will be recalled that the state governors under the aegis of the Nigerian Governors Forum, had on May 27, 2019, through their Attorneys-General, approached the court to halt the implementation of the regulations.

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The regulations had aside from setting modalities through which funds could be withdrawn from local government accounts, also set daily limit for such withdrawals.

In their suit marked FHC/ABJ/CS/593/2019, the plaintiffs, through their lawyer, Prince Lateef Fagbemi, SAN, prayed the court to nullify the regulations for being unconstitutional, null and void.

They urged the court to declare that by virtue of sections 4(7), 7(6)(a) and (b), 162(6) and 162(7) and (8) of the Nigerian Constitution, the state governments, “are not subject to control or directive of the Nigerian Financial Intelligence Unit or body on the terms and manner of operation of State Joint Local Government Account other than by a law passed by the states’ House of Assembly”.
Cited as defendants in the matter were the Attorney-General of the Federation, the NFIU, and the Nigeria Union of Local Government Employees, NULGE.
Meantime, while dismissing the suit, Justice Ekwo, held that the essence of the regulation was to guarantee transparency in the spending of funds that accrue to local governments.

“I am unable to see how the provisions of the 2nd defendant’s (NFIU) guidelines contradict or conflict with the provisions 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 shall be paid”, Justice Ekwo held.

He said 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.

“The duty of the court is limited to expounding the law and not expanding it.

“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.

“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 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. This is the order of this Court,” Justice Ekwo held.

The court equally struck out the name of the 37th plaintiff (Incorporated Trustees of the Nigeria Governors’ Forum) from the suit for lack of locus standi to institute the action.

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