Why court dismissed governors’ suit against NFIU on regulation of LG spending

A Federal High Court, Abuja, on Monday, dismissed a suit filed by the 36 states’ Attorneys-Generals and the Nigeria Governors’ Forum for lacking merit.

The state governments had filed the suit seeking to stop the Nigerian Financial Intelligence Unit (NFIU) from implementing its guidelines on local government spending.

In their argument, they stated that the guidelines were in breach of the financial autonomy of the various states enshrined in the constitution.

How the judge ruled

In his judgement, Justice Inyang Ekwo who dismissed the suit agreed with the AGF counsel that going by Section 23 (2) (a), Section 28 (2) and Section 31 of the NFIU Act, the “unit has the power to make the guidelines.”

He held that upon studying the provisions of the NFIU’s guidelines, he was unable to see where the provisions thereof contradict or conflict with the provision of Sections 7(1), (6) (a) and (b) of the constitution.

He said “I am also unable to see how the provisions of the 2nd defendant (NFIU)’s 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,”

He said the provisions of the guidelines do not contradict or conflict with the provisions of the 4th Schedule to the 1999 Constitution which prescribes the functions of a local government council.

He noted that “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,”

Speaking on whether the NFIU guideline contradicts section 7 he said he found no provision of NFIU guidelines that contravened the provisions of Sections 7(1), (6) (a) and (b), 162 (6), (7) and (8), and the 4th Schedule to the 1999 Constitution (as amended).

“I also find that the case of the plaintiffs has not been established and I so hold,” he ruled.

Justice Ekwo, consequently, answered questions 1 to 5 formulated by the plaintiffs on the originating summons in the negative.

Consequently, Justice Ekwo declared “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.”

What you should know

  • The NFIU on May 6, 2019, issued guidelines to stimulate the reduction of crime vulnerabilities created by cash withdrawals from local government funds across the country, which took effect from June 1, 2019.
  • The guidelines limited the cumulative amount that can be withdrawn from a local government account to not more than N500,000 daily.
  • According to the guidelines, any other transaction must be done through valid cheques or electronic funds transfers and others.
  • It also mandates that state and local government joint accounts be operated solely as transit accounts from which funds will be distributed directly to the accounts of the local governments.
  • Following the guidelines, the state attorneys sued the Attorney-General of the Federation (AGF), the NFIU and the Nigeria Union of Local Government Employees (NULGE) arguing that the directive breached financial autonomy enshrined in the Nigerian constitution
  • They sought the court to determine whether having regard to the combined effect of Sections 7 (1) (6) (a) and (b), 162 (6) and 162 (7) and (8) and the 4th Schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) which, among others.
  • They sought the court to determine whether the state governments of the federation are subject to the directives or control of the NFIU or anybody howsoever called, other than the House of Assembly of each state as to the manner and terms of the operation of State Joint Local Government Accounts in their respective states.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button