May 19, 2024

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Buhari blocks govs from tampering with LG allocations  * Direct allocation to  LGAs takes off 1st June

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Buhari blocks govs from tampering with LG allocations 
* Direct allocation to  LGAs takes off 1st June
 * Pegs daily cash withdrawal from LG accounts at N.5m
By Steve Oko
The era of leaving Local Government funds at the mercy of greedy Governors may have ended as the President Muhammadu Buhari -led Federal Government has abolished the criminal practice of lumping states and LG allocations together under the guise of State, Joint Local Government Accounts.
This directive was contained in a guideline  issued  by the Nigerian Financial Intelligence Unit, NFIU, after its meeting with officials of financial banks in Abuja on Monday. 
 NFIU  was carved out from the Economic and Financial Crimes Commission, EFCC,  to tackle deficiencies in Nigeria’s anti-money laundering and counter-terrorism financing implementation. 
Wawa News Global also gathered that the measure was necessitated by threats by the international financial watchdog to sanction Nigeria because of financial abuses. 
NFIU, directed that henceforth, allocations accruing to LGAs from the federation accounts shall be wired directly into the council accounts.
The agency has equally fixed  June 1, 2019, as the takeoff date of the new order, urging all banks and stakeholders to ensure strict compliance. 
It threatened heavy sanctions against any state or bank that flouts the directive. 
Meanwhile, it has now become an offense for any council to make a cumulative cash withdrawal of above N500,000 per day, as NFIU has directed that any payment above N500,000 should be by  cheques or electronic transfers.  
Below is a full text of the notice entitled: “Guidelines To Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria, Effective 1st June 2019”.
” This is prompted by threats by the international financial watchdog to sanction Nigeria because of abuse of financial abuse. 
The agency said: “The NFIU requests all financial institutions, other relevant stakeholders, public servants and the entire citizenry to ensure full compliance with the provisions of the guidelines already submitted to financial institutions and relevant enforcement agencies including full enforcement of corresponding sanctions against violations from 1st June, 2019.
 “Having realized through analysis that cash withdrawal and transactions of the State, Joint Local Government Accounts (SJLGA), poses biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole, decided 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. 
“In addition, taking such measures was necessitated by prompting reasons on the NFIU to respond to threats of isolating the entire Nigerian financial system by other International financial systems because of deficiencies in our anti-money laundering and counter-terrorism financing implementation. 
“Therefore, it is no longer possible to allow the entire system to suffer the deliberate and expensive infractions or violations by public officials and/or private business interests. 
“Henceforth, all erring individuals and companies will be allowed to face direct international and local targeted sanctions, in order not to allow any negative consequences to fall on the entire country. 
“To be precise, with effect from 1st June any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100%, 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 N500,000:00 per day. Any other transaction must be done through valid cheques or electronic funds transfer. 
“The complete guidelines have been released to the Governor of the Central Bank of Nigeria, the Chairman, Economic, and Financial Crimes Commission (EFCC), the 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”.
Steve Oko, Publisher/C.E.O, WaWa News Global. For more information on advert placement and news coverage, contact us on: 08038725600, or via email; Always read WaWa News Global - Your most dependable online news platform for the latest breaking news in Nigeria.
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