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Court Certified Local Government Financial Autonomy

One cheering news that filtered into the Nigeria News Stream across almost all traditional electronic and social media handles today(23rd May 2022), is the legal victory of the Federal Government and the Nigerian Financial Intelligence Unit(NFIU) over the State Governors concerning the Financial Autonomy of the Local Government Joint Account at the Federal High,Abuja.
The ruling was delivered by Justice Inyang Ekwo who held that the case lacked merit. He emphasised that the essence of the NFIU guideline is to entrench financial transparency in Government transactions at the Local level.

The Attorney-Generals of the 36 States Government has filed a suit against the NFIU from implementing it’s guideline which it had issued in June 2019 on the administration of the Local Government(LG) funds.
The NFIU guideline placed a benchmark amount of Five Hundred Thousand Naira (=N=500,000.00) as the amount of cash that can withdrawn daily from the LG account.
The State Governments had argued that the Federal Government(FG) through NFIU is interfering with the State Governments powers to oversee transactions on Local Government Joints Accounts citing provisions of the 1999 constitution.

The implications of this cheering news is that the LG is beginning to get its freedom from the jugular oppression of successive States Governments across the nation, that has strangulated it over the years, thereby preventing people at the grassroots from real development.

The primary function of the Local Government as spelt out in Section 7 of the 1999 constitution includes the provision of education and maintenance of schools, provision and control of markets and motor parks, the development of agricultural and natural resources, to plan and execute developmental works like laying of roads, electrification and supply of drinking water.
But all this has been literally impossible over the years in Nigeria because of the overbearing influence of successive State Governments besides other indices, especially since the return of Democracy in Nigeria in 1999.

So when the Executive Order was signed by President Muhammadu Buhari in May 2020, to grant Financial Autonomy to the judiciary, legislature as well as the Local Government Councils, it was applauded by a large section of the society as a right the move and as a landmark achievement. It was considered a right course in setting the right political tone for structural and palpable economic development at the Local Government beyond the rhetorics of politicians.

Now with this ruling at the Federal High Court Abuja, financial crimes aided by large cash withdrawals from the LG accounts by State Governments will be curbed. Since every other transactions, beside the daily Five Hundred Thousand Naira cash withdrawals, will be 100% disclosed to the Independent Corrupt Practices and Other Related Offences Commission(ICPC) and the Economic and Financial Crimes Commission(EFCC).
This will sound a note of caution to the officials of the LG to be prudent in the discharge of the people’s funds
It will pressure them to work the talk on their developmental agenda as every penny spent on a supposed project can be verified.

Also, the NFIU guidelines which was upheld by the Federal High Court Ruling yesterday, will make funds readily available for the Local Governments to promptly pay staff salaries and engage in their various community specific developmental needs.

Financial Autonomy will help Local Governments judiciously tackle poverty, insecurity and stimulate the local economy. This is because Local Governments are more closer to the people and have knowledge of specific services and/or amenities the locals needs per time. This puts them in better positions to unlock local development better than the Federal and State Governments.

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