Court to governors: Your case on LG funds lacks merit
A Federal High Court has ruled that the case filed by the 36 state governors of the federation restricting financial regulations on the handling of local government funds lacks merit.
Justice Iyang Ekwo, on Monday, ruled in favour of the Nigerian Financial Intelligence Unit (NFIU), in relation to its guidelines limiting withdrawals from local government accounts.
The guidelines stipulate that monies received through the States/Local Governments Joint Accounts should be disbursed immediately to the local government who owns them. The NFIU regulation also pegs daily cash withdrawal limit from the State/LG joint account to N500,000.
The guidelines were to take effect from June 1, 2019. Displeased, the state governors who are reputed for misappropriating local government allocations filed a suit to stop the regulations from taking effect.
The governors argued that the guidelines, particularly provisions 1 to 6  and the penalties prescribed  are ultra vires the power of the NFIU under Sections 3 (1) and 23(2) (a) of the Nigerian Financial Intelligent Unit Act, 2018 and therefore unconstitutional.
In his judgement, Justice Ekwo said he could not see where the guidelines contradict the provisions of sections 7(1), (6) (a) and (b) of the Constitution.
The judge, in addition, said the guidelines did not also conflict with Section 162(6) or the 4th Schedule to the 1999 Constitution.
The “duty of the court is limited to expounding the law and not expanding it,” the judge said:
“On the whole, I see the provisions of the guidelines of the 2nd defendant as seeking to direct the monitoring of accounts, transfers and any other means of payment or transfer of funds of local government councils as provided for in Section 3 (1) (r) of the Act of the NFIU.
“It only limits cash withdrawal made from any Local Government Account anywhere in the country to amount not exceeding N500,000.00 (Five Hundred Thousand Naira) per day.
“Any amount higher than that can be done using other methods of banking transaction save cash.
“Unless it can be shown that there is any provision of the 1999 Constitution (as amended) which these provisions of the 2nd defendant’s guidelines have contradicted or conflicted directly and practically, then the issue of unconstitutionality cannot be said to arise.”
“I find, in the end, that the case of the plaintiffs lacks merit and ought to be dismissed and it is hereby dismissed,” the judge said.
