In it’s move to reduce the level of interference by State Government’s on the Local Government’s financial dealings, in Nigeria, 1st June 2019, has been slated by the Federal Government for the commencement of direct payment of Financial allocations from the Federal to the 174 Local government LGAs across the Nation.

The reports according to news source Vanguardngr.com says, June 1, 2019 takeoff date for direct allocations to 774 LGAs Limits daily cash withdrawal from LGA accounts at N500,000.

Report continues that ,the action was been “prompted by threats by the international financial watchdog to sanction Nigeria because of abuse of financial abuse.”

It explaint , ” the FG set June 1, 2019 takeoff date for direct allocations to 774 LGAs Limits daily cash withdrawal from LGA accounts at N500,000 Any trFG set 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”

This will be monitored by the newly inaugurated Financial Intelligence Unit, NFIU, which was excised from the Economic and Financial Crimes Commission.

The set June 1, 2019, as the takeoff date of the new order, will be making it compulsory for all LGA allocations to go straight to their respective bank accounts.

More about the decisions are contained in a guideline as released by the NFIU after a lengthy meeting with officials of commercial banks in Abuja is aimed at checkmate excessive Cash interferance of State Government’s on the LGs, and Cash Withdrawals from LG Funds throughout Nigeria.

The guideline stated that, with all concerned are to comply with Effect from 1st June 2019, in order to overcome the consequences of the threats by the international financial watchdog to sanction Nigeria because of abuse of financial abuse ,which was issued through NFIU .

NFIU also warns banks to comply with immediate effect, saying that any of them that flouts the order would be sanctioned accordingly. 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.

Stating that, “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.

NFIU is a newly insugurated Financial Intelligence Unit, which was excised from the Economic and Financial Crimes Commission, that 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.

Credit: Vanguard

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