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HEDA accuses Lagos, Zamfara of violating NFIU rule on LG funds, seeks probe


Two State Governments, Lagos and Zamfara have been accused of gross violation of the new Nigerian Financial Intelligence Unit, (NFIU) guidelines on disbursement of funds belonging to local councils.

Interestingly, while Lagos is Nigeria’s richest state, Zamfara is at the bottom of the country’s economic scale with her smallest Internally Generated Revenue, (IGR) among the 36 states of the federation.

In a petition to the NFIU, Human and Environmental Development Agenda, (HEDA) asked the anti-corruption unit to investigate the diversion of Local Government funds by the governments of the two states. The petition was signed by HEDA’s Chairman, Mr Olanrewaju Suraju.

The Central Bank of Nigeria, (CBN) and the Nigeria Financial Intelligence Unit, (NFIU) had issued guidelines that all the 774 Local Government Councils of Nigeria must get their statutory allocations as released by the Federal Ministry of Finance without the State Governments tampering with them.

Citing data from the Office of the Accountant General of the Federation (OAGF), HEDA said State Governments continue their serial rape on LG funds. Between 2010 and 2018 for instance, OAGF said State Governments had unchecked access to N14,708,838,964,375— about N14.71 trillion worth of funds meant for local councils between 2010 and 2018.

In the petition, HEDA stated “On the 9th July, 2019 that barely a month after the Nigeria Finance Intelligence Unit (NFIU) issued guidelines barring State Governments from touching funds meant for the third tier of government, it was reported that the Lagos State government deducted hundreds of millions from Local Governments’ allocation for June 2019.”

It listed Alimosho Local Government as one of the victims. It said the council divided into six Local Council Development Areas (LCDAs) were anticipating splitting the sum of N750 million but that the Lagos government left them with a little over N320 million.

According to HEDA the Lagos State Government has not refuted media reports that Abimbola Umar, the State’s Accountant-General, had told the Joint Account and Allocations Committee in the State that a waiver had been obtained from the Financial Intelligence body, to make deductions from funds apportioned to the LGA, for the payment of the salaries, gratuities and pensions of Local Government staff. In the report, there are controversies surrounding the alleged clearance from the NFIU to touch local government funds.

A similar case was also reported that on July 9, this year, when the Zamfara State chapter of Association of Local Governments of Nigeria (ALGON) said the State Government, through its Ministry of Local Government and Chieftaincy Affairs hijacked the federal statutory allocation due to the 14 councils for the month of June. The council Chairmen were quoted to have said the State Government only gave N5million to each Local Government from the allocation.

ALGON in Zamfara had equally called on the Federal Government, through the CBN and NFIU, to as a matter of urgency intervene in the matter so they could have access to their funds to enable them meet the yearnings and aspirations of their people.

HEDA said based on the issue of N5 million given to each local government out of their June allocation as alleged by the ALGON, Zamfara State Government through the Director General, Press Affairs to the Governor, Malam Yusuf Idris refuted the allegation, saying the Governor was ready to abide by the Federal Government’s policies and programmes, particularly on the issue of Local and State Governments’ joint account for the development of the State’s socio-economic potentials. HEDA said the rebuttal appear to be a mere political statement.

The foremost anti-corruption group said Lagos and Zamfara violate Provision 2 which states that; “it is hereby provided that the State Joint Local Government Account is only a collection account of funds to be shared to only Local Government Accounts in Accordance with Section 162(7) of the Constitution of the Federal Republic of Nigeria. 1999 (As Amended) and not for any other transaction or purpose.

Provision 3 also states that “it is hereby provided that with effect from 1st June, 2019, no withdrawal shall be done from the State Joint Local Government Accounts unless and until that withdrawal is going into a particular Local Government Account”.

Justifying the urgent need for the probe, HEDA said “The NFIU enforcement and guidelines to reduce crime vulnerability created by cash withdrawal from Local Government funds throughout Nigeria became effective on the 1st June, 2019 and these reports read July respectively. The reports alleged that both Lagos and Zamfara States have breached the above stated provisions of the guidelines. However, we believe in due process and due diligence as well as presumption of innocence which is why our demand, hinged on our mandate to promote accountability and transparency in governance, is requesting for an urgent investigation into these allegations in order to possibly enforce the sanctions enshrined in the NFIU guidelines.” It urged the NFIU to invoke Section 9 of the guidelines which states that:

“It is hereby provided that any public officer anywhere in the country and/or any private citizen found undermining or violating these guidelines will be investigated and prosecuted under the NFIU Act, 2018, the ML(p)A, 2011(As amended), the EFCC Act, 2004 and the ICPC Act, 2000, by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC)”.

According to HEDA, “This petition is a call for your agency to urgently look into the allegations against these states and also to use this as a channel to pose a strong demand on other states to do and act in accordance to the guidelines. This demand is for a diligent investigation to be conducted to visit the sanctions as vested in Provisions 8 and 9 of the Guidelines on the States and officials found wanting and the Financial institutions involved, to serve as a deterrent to other states and as a wake-up call to future defaulters.”

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