Opinion: On the Nigerian Financial Intelligence Unit plans to transfer monthly allocation direct to local government councils~ Ekokoi Solomon

Last week, the news broke that the Nigerian Financial Intelligence Unit (NFIU) plans to transfer the monthly allocation due the local government councils directly to them, without going through the state-local government joint account as required under section 162(5) &(6) of the Constitution of the Federal Republic of Nigeria 1999.

I must state at this point that the current practice by state governments to withhold funds meant for local governments is not only unconstitutional and illegal, it is a crime against the people at the local government areas who have the right to economic and social development.

Nevertheless, the planned action to directly transfer the funds standing to credit of the local governments in the federation account will fail, unless there is a constitutional amendment to clear up what seems to be the confusion in the Constitution. The basis for this argument is the judgement of the Supreme Court of Nigeria in the case of A-G Ogun State & Ors v A-G Federation in 2002. In that case, Ogun, Lagos, Oyo, Osun and Ondo states brought actions against the federal government, which were consolidated as their various claims were similar in nature.

The major complaint of the five states against the federal government was that the latter was in breach of section 162(5) &(6) of the the Constitution for transferring funds due to the local governments directly to them. They, therefore, urged the Court to declare section 6(1) &(3) of the Allocation of Revenue (Federation Account) Act 2002, which was passed by the National Assembly to allow for direct transfer of local government funds to the local governments, as unconstitutional, null and void. The Court agreed with them and so declared. And the good intentions of the federal government was over turned.

The recent effort by the NFIU is bound to go the same way. For the records, I do not see why state governments should hold unto funds meant for the local governments. There is the argument that local government allocations, as they are currently, are not sufficient to cater for all the obligations of the local government councils, for example, the payment of salaries. And for this reason, state governments are in essence constantly providing additional funds to help meet these obligations. I ask the following questions: Why not allow funds of the local governments go to the local government councils and provide those additional funds to the local government councils as grants?

What is advocated here is not blanket grants but grants made to local governments in line with their economic blueprint or plan. By so doing, a healthy competition will be encouraged among local government councils across the country. It must be noted that no state can claim to exist without the local governments, just as the federal government does not exist without the states. Therefore, no state can claim to exist in a vacuum. This means that the funds collected from the federation account by states are also for the local government areas as they are meant to develop all the local governments that constitute a state. I have not seen any state that is detachable from its local governments. The implication is that a state is the sum of the entire local governments within it. If this is the case, why must a state governor be the one to determine what is good for every local government within a state, when each local government has its own unique needs?

Under Fourth Schedule to the Constitution, one of the functions of local governments is to promote economic development and they are required to participate along with the state governments to promote economic development in each state. The situation in which economic development has become the sole preserve of the state governments is a major factor responsible for Nigeria’s stunted development. And as long as we sit back and continue in this manner, no amount of economic development conferences or rhetorics from governments will change the reality that Nigeria cannot and will not develop.

Barr. Ekokoi Solomon is a public analyst based in Uyo

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