The government said it will achieve this by abolishing state and local governments joint accounts “through constitutional means.”
Secretary to Government of the Federation (SGF), Boss Mustapha, said this at a conference on Nigerian local governments, organised by SEGNIP Promotions Limited and the Department of State and Local Government Affairs, Office of the Secretary to the Government of the Federation (OSGF).
On May 6, the Nigerian Financial Intelligence Unit (NFIU) had issued a directive to commercial institutions via a document it tagged ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria.’
The document sought to ban financial transactions on state/local governments joint account, and placed cap on cash withdrawals from local government accounts in Nigeria.
However, the directive to banks to stop transactions on such accounts met stiff opposition from the governors, leading to at least two law suits.
However, with the latest statement from the SGF, it appears the Buhari administration is poised on going on with its agenda on the local government finances.
Mr. Mustapha, who was represented by the Director of Special Duties in the SGF office, David Attah, at the event described the joint accounts as inglorious.
He said the accounts have been grossly abused, leading to major frictions.
The SGF said such abuse gave rise to the agitation for fiscal autonomy of local governments.
He said states have starved local governments of needed funds to discharge their statutory responsibilities as an independent tier of government.
“After so many ruinous years of our recent past, we certainly cannot live with the continued mismanagement of public funds (joint account) any longer.
“Most of us know too well the dangers and consequences of this sustained degradation of our local government system which manifest in increased wave of crimes and social maladies like terrorism, kidnapping, cultism, neighbourhood gangs, human trafficking, baby factories, dilapidated primary schools and primary health facilities, influx of youths to urban centres and pernicious rural poverty which have dovetailed into various dimensions, agitations, and unrests,” he said.
He linked the starvation of the local governments to the spate of insecurity in the country.
“More so, it is uncanny that most of us fail to see the connection between moribund local governments and Boko Haram insurgency, for instance. Suffice to say that no ‘baby factory’ or incidence of kidnapping would find space where local government councillors are fully involved in governance and work with landlords associations and town unions. “In the midst of all these, there is no state, not even one, that showed an example by devising a system that made the local governments work or gave a proper account of the local government funds.
“All of us, directly, or tangentially, are exposed to the impact of local government administration daily. Therefore, mismanagement and mal-administration at this level of governance will connote impacting negatively on our people with direct implication for banishing a large number of the population to abject poverty and penury,” he said.
The SGF said with the introduction of the NFIU Act and the new local government administration account reporting system, the present administration of President Buhari has taken steps to upgrade the anti-graft or money laundering regulations to reduce vulnerabilities created by cash withdrawals from local government funds throughout the country.
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