By Dipo Olowookere
In order to reduce the wasteful use of allocations of local councils in Nigeria by Governors, the Nigeria Financial Intelligence Unit (NFIU) has set out some rules.
In a notice yesterday, the agency said the new rules will take effect from June 1, 2019.
In the new guidelines, the amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state” and not for other purposes.
It was emphasised from next month, “Any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 percent, both locally and internationally.”
In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government for a cumulative amount exceeding N500,000 per day and any other transaction must be done through valid cheques or electronic funds transfer.
The NFIU said it came up with these new regulations after it observed that cash withdrawal and transactions of the State, Joint Local Government Accounts (SJLGA), pose biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole.
According to the agency, these lapses forced it to “uphold the full provisions of section 162 (6) (8)of the 1999 Nigerian Constitution as amended which designated State Joint Local Government Account into which shall be paid allocations to the local government councils of the state from the federation account and from the government of the state. The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state and not for other purposes.
“As far as the NFIU is concerned the responsibility of the account as a collection account is fully reinstated,” the notice seen by Business Post said.
The NFIU said the complete guidelines has been released to the Governor of the Central Bank of Nigeria, the Chairman of the Economic and Financial Crimes Commission (EFCC), Chairman Independent Corrupt Practices Commission (ICPC) and Chief Executive Officers of all banks and other financial institutions.
“Any state government that is willing to seek any expert economic advice in the unlikely event of these guidelines constituting an inconvenience to the management of the state can work with the NFIU and /or CBN,” it said.
