FG Blocks Governors From Monopolising Local Government Allocations And Sets New Cash Policies (Check Them Out)

Alarmed by the continuous pillage of cash allocated to local government councils across the country by the state governments through the Stat, Joint Local Government Accounts, the federal government on Monday 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.

The decisions are contained in a guideline released by the NFIU after a lengthy meeting with officials of commercial banks in Abuja.

Checkout other policies made below:-

The federal Gov’t Sets June 1, 2019 takeoff date for direct allocations to 774 LGAs

Limits daily cash withdrawal from LGA accounts at N500,000

Any transaction above N500,000 must go via cheques/e-transfer

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.

“As far as the NFIU is concerned the responsibility of the account as a collection account is fully reinstated. “In addition, taking such measures was necessitated by prompting reasons on the NFIU to respond to threats of isolating the entire Nigerian financial system by other International financial systems because of deficiencies in our anti-money laundering and counter-terrorism financing implementation.

“Therefore, it is no longer possible to allow the entire system to suffer the deliberate and expensive infractions or violations by public officials and/or private business interests.

“Henceforth, all erring individuals and companies will be allowed to face direct international and local targeted sanctions, in order not to allow any negative consequences to fall on the entire country.

“To be precise, with effect from 1st June any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100%, both locally and internationally.

“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government for a cumulative amount exceeding N500,000:00 per day.

Any other transaction must be done through valid cheques or electronic funds transfer.

“The complete guidelines have been released to the Governor of the Central Bank of Nigeria, the Chairman, Economic, and Financial Crimes Commission (EFCC), the Chairman, Independent Corrupt Practices Commission (ICPC) and Chief Executive Officers of all Banks and other financial institutions.

“Any state government that is willing to seek any expert economic advice in the unlikely event of these guidelines constituting an inconvenience to the management of the state can work with the NFIU and /or CBN,”

The NFIU said.

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