Reasons Why CBN Is Yet To Release Funds To 774 LGAs
Yemi Cardoso
Reasons Why CBN Is Yet To Release Funds to 774 LGAs
The Federal Government explained on Wednesday why, despite the Supreme Court’s order, the Central Bank of Nigeria, CBN, has not commenced the direct release of funds to the country’s 774 Local Government Areas, LGAs.
In separate presentations, the Attorney-General of the Federation and Minister of Justice, Mr. Lateef Fagbemi, SAN, and CBN’s Director of Legal, Mr. Kofo Salam-Alade, maintained that modalities that would enable the various LGAs to draw funds directly from the federation account were not in place.
The duo further disclosed that the necessary bodies are still profiling those who would serve as signatories to the accounts of the various LGAs.
Speaking at a state-of-the-nation discourse on strengthening local government autonomy in Nigeria, organised by the Nigerian Bar Association, NBA, the AGF revealed that shortly after the July 11, 2024, landmark judgement of the Supreme Court that granted fiscal autonomy to the LGAs, an implementation committee was set up.
According to the AGF, whose speech was read by the Director of Civil Litigation, Federal Ministry of Justice, Mr. Tijjani Gazali, SAN, the committee is comprised of representatives of FG, the Association of Local Governments of Nigeria, ALGON, and the Nigerian Governors Forum, NGF.
He said the committee has been working assiduously to develop “the most practicable framework for the full implementation of the judgment, especially regarding direct payment of allocations from the Federation account to Local Government councils.”
“The committee is expected to complete its mandate any time from now and present its recommendation to Nigerians,” the AGF added, saying President Bola Tinubu determined to emancipate the LGAs as the third tier of government in the country that led his administration to drag the 36 Governors to the Supreme Court.
However, the AGF decried that despite the apex court’s judgment outlawing the illegal removal of democratically elected local government councils by State Governors, it was unfortunate that some states have continued to flagrantly carry on with the illegality.
The Justice Minister described as worrisome “the unconstitutional connivance by State Governors and their State Houses of Assemblies to wily nilly dismantle democratically elected local government structures without recourse to the rule of law and replace them with their stooges.”
“Let me state in unequivocal terms that this act is tantamount to treason and must be treated as such. While it is true that Section 308 of the Constitution grants the Governor immunity from prosecution, I wish to be clear that this flagrant disobedience to the Supreme Court judgment will have unpleasant consequences for the State as a whole, should it persist,” the AGF warned.
He said the local government structures had almost become extinct until his office took the matter before the apex court.
Meanwhile, providing more insight into why the LGAs had yet to receive funds directly from the federation account despite the Supreme Court’s order, CBN’s Director, Legal, Mr. Salam-Alade, said the apex bank had no banking relationship with the LGAs.
He said the bank had commenced the process of profiling those who would serve as signatories to the accounts of the respective LGAs in its bid to ensure transparency and accountability.
“This is all about the standard procedure in the form of KYC (Know Your Customer). Anyone who will be a signatory to the account must be profiled.
“The process is ongoing, and we are collaborating with the AGF office. We have also written to the LGAs.
“All that ALGON needs to do is encourage its members to approach the CBN within their locality. Within 48 hours, their problem will be solved.
“We are using this opportunity to call on the 774 men to come forward for their documentation. No account can be operationalized without the prerequisite Customer Due Diligence, CDD,” the CBN Legal Director added.
However, contrary to CBN’s claim, a representative of ALGON at the event, Mr. Sam Akala, said he was not aware that the apex bank wrote to any LGA regarding the account opening process.
“I cannot confirm that such communication has been received officially,” he insisted, even as he expressed the readiness of ALGON to embrace the challenge of taking development down to the grassroots.
Earlier in his welcome remarks, NBA President Mazi Afam Osigwe, SAN, said the discourse aimed to hold the association to a position that would not only guarantee peace and security but also ensure that the LGAs closest to the people become functional and their finances used for the good of the people.
“There must be democracy at the Local Government level. All the other tiers of government must allow the LGs to breathe.
“If we fail to get it right at the LG level, we may be setting a stage for a greater calamity,” Osigwe, SAN, added.
In addition to Attorneys General of States and other dignitaries, the event, which featured a retired Justice of the Supreme Court, Ejembi Eko, as the guest speaker, included heads of key government agencies and senior legal practitioners in the country.
