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NFIU Maintains Stand on Local Government Funds

The management of the Nigerian Financial Intelligence Unit (NFIU) has insisted that its earlier directive to banks and Governors of the 36 states of the federation on the use of local government allocation remains sacrosanct.

Some days ago, the agency prohibited the use of funds meant for the 774 local governments in the country by Governors from June 1, 2019.

Under the present arrangement, Governors have access to the allocation as a result of the joint account operated by the states and their local councils.

In a bid to stop the reckless spending of the funds by Governors, who rarely make allocations available to the councils, the NFIU gave an order to banks not to allow Governors access to the money anymore.

In a press statement today, the agency reiterated its position that the June 1, 2019 effective date of the guidelines to all financial institutions and public officials on the local government funds stands.

“The Unit also maintains its understanding of the 1999 constitution that no debit is allowed on any local government funds unless and until the funds are credited to and reach the bank accounts of a local government in any state of the federation.

“The provision of the cumulative cash withdrawal not exceeding N500,000 per day is also firmly in place effective June 1, 2019.

“We observed isolated comments to the contrary in the past few days which in our assessment only amounted to wilful misinterpretation of the 1999 constitution and therefore, of no consequences to the operations of the entire financial system.

“The provision of the guidelines to the financial institutions was also on account of legitimate powers provided by the NFIU Act 2018 and any violations of the said guidelines will be sanctioned appropriately,” the statement said.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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