36 governors lose suit against financial autonomy for local governments

JUSTICE Inyang Ekwo of a Federal High Court sitting in Abuja, on Monday, dismissed a suit filed by the 36 states’ Attorneys-Generals and the Nigeria Governors’ Forum challenging the Nigerian Financial Intelligence Unit (NFIU) from implementing its guidelines on the spending of the local governments. 

Ekwo, having listened to arguments for and against the suit and the final written addresses of parties in the matter, dismissed the suit for lacking in merit and held that, upon studying the provisions of the NFIU’s guidelines, he was unable to see where the provisions thereof contradict or conflict the provision of Sections 7(1), (6) (a) and (b) of the 1999 Constitution. Listed as defendants in the suit are the Attorney General of the Federation (AGF), the NFIU and the Nigeria Union of Local Government Employees (NULGE). 

Ekwo 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 1999 Constitution (as amended) 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 guidelines did not contradict Section 162(8) of the constitution which prescribed that the amount standing to the credit of the local government council of the state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state. 

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Justice Ekwo noted that the provisions of the second defendant’s guidelines do not contradict or conflict with the provisions of the fourth schedule to the 1999 Constitution which prescribes the functions of a local government council and added 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 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 second defendant’s guidelines have contradicted or conflicted directly and practically, then the issue of unconstitutionality cannot be said to arise,” Ekwo held. 

Justice Ekwo, who answered questions one to five formulated by the plaintiffs on the originating summons in the negative, held that, “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.” 

Earlier the judge also struck out the name of the 37th plaintiff (Incorporated Trustees of the Nigeria Governors’ Forum) from the suit for lack of locus standi (legal right) to file the suit. The 36 states, in the suit, marked: FHC/ABJ/ CS/563/2019 filed in the names of their Attorney-Generals, are challenging the constitutionality of the NFIU guidelines, which came into effect on June 1, 2019. 

The NFIU claimed that the 2019 guidelines, which among others limit daily cash withdrawal from the state/LG joint account to N500, 000 is intended to reduce “crime vulnerabilities created by cash withdrawal from local government funds throughout Nigeria effective from June 1, 2019.”