Alarmed by the continuous pillage of cash allocated to local government councils across the country by the state governments through the State, Joint Local Government Accounts, the federal government on Monday, May 6, 2019, outlawed the meddling of states into council allocations.
The federal government, through the newly inaugurated Financial Intelligence Unit, NFIU, which was excised from the Economic and Financial Crimes Commission, set June 1, 2019, as the takeoff date of the new order, making it compulsory for all LGA allocations to go straight to their respective bank accounts, Vanguard reports.
The decisions are contained in a guideline released by the NFIU after a lengthy meeting with officials of commercial banks in Abuja.
The notice entitled: Guidelines To Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria, Effective 1st June 2019, is said to have been prompted by threats by the international financial watchdog to sanction Nigeria because of abuse of financial abuse.
The NFIU warned banks to comply with immediate effect, saying that any of them that flouts the order would be sanctioned.
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,” the NFIU stated.