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Autonomy: Court rules in favour of NFIU over LG spending, dismisses governors’ suit 

Autonomy: Court rules in favour of NFIU over LG spending, dismisses governors’ suit 
May 23
16:31 2022

A federal high court in Abuja has delivered a judgement in favour of the federal government and the Nigerian Financial Intelligence Unit (NFIU) on the spending of local government joint accounts nationwide.

Inyang Ekwo, a justice, gave the ruling on Monday, according to a statement signed by Ahmed Dikko, chief media analyst, NFIU.

The intelligent unit had in June 2019 issued guidelines aimed at curbing crime vulnerabilities created by cash withdrawals from local government accounts by various state governments.

The guideline, which was on money laundering risk and vulnerabilities, advised all banks not to honour transactions from joint accounts.


It also reduced cash withdrawal from local government accounts to N500,000 daily.

The guideline further directed that the states/local governments’ joint accounts should be used only for receiving funds and subsequently transferring them to local government accounts only.

“Immediately after the guidelines came into place, most local governments across the country stopped facing challenges in payment of staff salaries,” NFIU said in the statement.


Based on the development, the Nigerian Governors Forum (NGF) sued the FG and NFIU for interfering with state government powers to initiate transactions on LG joint accounts, citing provisions of the 1999 constitution.

In 2019, NGF approached a federal high court presided over by John Tsoho, a justice, to stop the NFIU’s guidelines from being implemented.

But Tsoho declined the request.

Another federal judge in Uyo, Akwa Ibom state, reportedly refused to restrain NFIU from pushing through with the guidelines.


Reacting to the latest ruling, Modibbo Tukur, director/CEO of NFIU, said the judgement was good because the federal government is always ready to protect both states and local governments by making funds available for their governance responsibility.

Tukur said councils can now channel their funds to improve local security.

“From this judgement and from today all transactions on local government funds will be disclosed to ICPC and EFCC 100 per cent and will be reported continuously,” Tukur said.

In March, the national assembly passed a bill seeking to grant financial autonomy to local governments across the country.


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