The Federal Government has taken steps to stop the State Governments across the country from controlling finances of the Local Government Councils in Nigeria, as has been the practice before now.
The Federal Government announced yesterday in Abuja through the newly lunched Nigerian Financial Intelligence Unit (NFIU) that the Joint Allocation Account existing between the state and local governments would cease to exist from next month, June 1, 2019.
Director of NFIU, Modibo Hamman-Tukur said once the policy becomes operational, the finances of the local government councils would be paid directly into the bank accounts of the respective local governments.
The NFIU Boss also said that the new guidelines also prescribes that the LGAs in Nigeria can not withdrew cash exceeding five hundred thousand naira daily from their banks, except through check books or e-transactions.
He said the measures were to eliminate treasury looting or curtail corruption among government officials; stop funds diversion by governors; check insecurity and ensure financial autonomy for the LGAs.
“The guidelines would make the joint account system currently in use only exist for the receipt of allocations from the federation account but not for disbursement”, he noted.
The new measures were introduced by the current administration to restore LGA’s financial autonomy.
This comes less than a year after President Muhammadu Buhari signed the NFIU bill into law, thus separating the agency from the Economic and Financial Crimes Commission (EFCC).
ISN Online reports that the new measures also stipulates that NFIU would register and monitor transactions through e-payment module.
“The joint account system in some states will only exist for the receipt of federal allocations meant for local governments and not disbursement”.
We gathered that the agency is committed to fighting money laundering, terrorism financing and proliferation of weapons.
The NFIU also advised the relevant banks to comply, as any contravention would attract sanctions.