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How the LGs Are Robbed of Funds

By Staff 31/03/2012 19:05:00

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Most local governments in the country are on their death beds, no thanks to their state governors who rob them of funds allocated to them

In the last five years he has been out of government, Yemi Osinbajo, a professor of law and former Lagos State Attorney General and Commissioner for Justice, has focused much of his energy overseeing the activities of the Orderly Society Trust, an organisation which he and Dolapo, his wife, established in 2007. The organisation’s “primary aim” according to its founders, is to “nurture and support institutions, ideas, values, practices and conventions which support ‘order’ in the society.”

One of the assignments which the Orderly Society Trust, decided to take upon itself and investigate was the state of local governments in Nigeria. It was a study that saw a team of researchers traverse the length and breadth of Nigeria. At the end of the exercise, Osinbajo, in a write up which served as the introductory part of the book containing the findings of the research, wrote: “As the tier of government that is closest to the people, the local government has the unique capacity to address the most direct needs of its community. However, the system of local governance in Nigeria has to a large extent, been ineffective. In addition to the failure of local governments to perform their constitutional functions well, the system of local government administration has been plagued by a lack of transparency and accountability.”

This damning verdict derives from the findings of the study, which are captured in the book: Making Local Governance Work for the Poor, and published in June 2010. The findings show an embarrassing disconnect between majority of the people and the local government councils, and “in no single local government did the majority of the respondents consider their local government ‘good’ in their total provision of public services to the poor.” That was not all. “A very high proportion of the two genders (72.8 percent male and 73.3 percent female) perceived the local government officials as corrupt.” One of the respondents was more direct in her accusation. She described local government administrators as corrupt officials who “are now being pursued by ICPC and EFCC.” That accusation still holds true today. The officials of the Economic and Financial Crimes Commission, EFCC and Independent Corrupt Practices and Other Related Offences Commission, ICPC, have been busy in recent months pursuing local government chairmen, both past and serving, across the states on suspicions or allegations bordering on looting, stealing or diversion of local government funds.

The latest court case involving the EFCC and a former local government chairman came up for hearing on March 13, 2012, at the Kogi State High Court, Idah. The accused were Musa Gwatana, former chairman, Bassa local government area, Kogi State, and three others: Joseph Yenusa, a director in Bassa local government; John Ekele, treasurer, Bassa local government and Abubakar Adamu, a staff in the works department, Bassa local government, all of who were arraigned on a four-count charge of criminal breach of trust and fraud to the tune of N162 million.

They were alleged to have, between September and December 2008 in Bassa, connived to obtain the sum of N160, 000,000 (One Hundred and Sixty Million Naira) from Intercontinental Bank PLC, Lokoja branch, on behalf of Bassa local government and diverted the loan for personal use.

They were also alleged to have diverted N2,000,000 (two million Naira) belonging to Bassa local government.

Prior to that, on April 18, 2011, the EFCC had dragged Stephen Ropo Asala, former chairman of Yagba West Local Government Council, Kogi State, to the Lokoja High Court for allegedly misappropriating N424 million. Other persons who were charged alongside him include Obaro Victor Kayode, former chairman, Yagba East Local Government Council, who was accused of looting N476 million; Tolorunjuwon Joseph Faniyi, former commissioner for local government and chieftaincy affairs who was alleged to have defrauded the state to the tune of 536 million and Samuel Abiodun Ojo, former agriculture commissioner in the state, 104 million. Their trial which initially began at the Federal High Court in Abuja, was transferred to a Federal High Court, Lokoja after lawyers to the accused sought for the case to be moved there.

On that same April 18 in Lokoja, another case was brought against Yahaya Abubakar, a former chairman of Okene local government in the same Kogi State. He was charged with looting 150 million Naira.

There was also another case involving Enesi Jimoh Suleiman, a former caretaker chairman of Adavi local government area of Kogi State, who was charged with embezzling N250 million local government funds. Similarly, Raji Owuda Ahmed, a former chairman of Adavi local government, was also taken to court by the EFCC to explain how he came about the money traced to him. He was arraigned on a six count charge bordering on criminal misappropriation of funds, money laundering and diversion of public funds for personal gains. His charge, which was read in court on April 15, 2010, states that while serving as the chairman of Adavi local government of Kogi State on or about July 2009, he “converted the sum of One Hundred and Fifty One Million Naira(N151,000,000.00) being proceeds of an illegal act to wit, criminal misappriopriation with the aim of concealing its illicit origin and thereby committed an offence contrary to section 14(1) (a) of the Money Laundering (prohibition Act) 2004.”

The same allegation of criminal misappropriation was brought against Gabriel Daudu, a chairman of Ogori/ Magogo Local Government Council in Kogi State. He was accused of embezzling eight hundred and thirteen (N813) Million Naira.

Kogi isn’t the only state where the EFCC made some arrests. Oyo State was also in the news last year over a “N8.25 billion road project scam” involving 33 local council chairmen in the state. Following the allegation and inquiry by the EFCC, it was revealed that N250 million each was given to the council chairmen for the road project - by Adebayo Alao-Akala, the state governor. But according to a source, there was suspicion that the funds were not used for what they were projected for. “The funds were expended on political activities preparatory to the general election that held last year.”

While the EFCC was busy prosecuting cases in the north-central and south-west regions of the country as seen in the case of Kogi and Oyo states, the Independent Corrupt Practices and other Related Commission, ICPC, could be said to be active in the North-West part of the country.

In the past three months since Abubakar Dusema, the new ICPC zonal head resumed duty, the financial transactions of the states under the zone have been subjected to scrutiny by the commission. So far, the inquest has yielded fruits in a place like Sokoto State where a lot of irregularities were reported. Contracts were said to have been awarded indiscriminately at inflated prices to unqualified contractors, and, in some cases, relevant contract files were not properly documented.

But it’s not only the local government chairmen that are guilty of this crime of looting, diversion or mismanagement of local government funds. Some state governments have also been similarly accused.

In the last 12 years of democratic rule, many state governors, past and present have been accused of misappropriating local government funds. One of them is Gbenga Daniel, the immediate past governor of Ogun State. He was accused by Tunde Oladunjoye, a former chairman of Ijebu East local government area, of diverting local government funds. That turned out to be one of the allegations for which Daniel was charged to court by the EFCC.

Recalling the experience to Newswatch, Oladunjoye said in November 2009, “the total allocation for the 20 LGs in Ogun State was N1.7 billion but Daniel gave us N700 million, which was less than half of what was due to us.” This was preceded by the event of October where he, Oladunjoye, mobilised “20 LG chairmen to reject their allocation cheques.” Daniel, he said, wasn’t happy about that, and it further worsened the existing frosty relationship between them. Before then, Oladunjoye and some of his colleagues had written to Daniel “to deduct only what is statutory from our allocation and specifically the exact amount of money due to the teaching and non-teaching staff of the Local Government Education Authority, LGEA.” According to Oladunjoye, nothing came out of that. “For example, my bill for LGEA was about N28 million monthly, but the governor was deducting N39 million. That is N11 million in excess. With N11 million, I will build three two bed-room community health centres every month. I was angry. Why should state government pay primary school teachers on our behalf? Was the federal government paying secondary school teachers on behalf of the state government?”

How the state governors come to be associated with local government funds has its root in the manner the funds are disbursed. The 1999 Constitution, demands that the local government and state government operate a joint account through which the federal government would remit their monthly allocations to them. It shouldn’t be a complex task splitting the sums, but some state governments – governors in fact — often choose not to release the exact local government funds once the monies are received from the federation account. Many of the governors choose to, first, withhold such monies, and then, as they deem fit, release same to the councils.

That, at times, leads to controversy. Where the state governments are not accused of tampering or embezzling local government funds, they deliberately place huge responsibilities on the local government council, such that local government funds are then deployed to finance projects that fall outside their jurisdiction. That way, the core local government matters or projects are left unattended to, or are not well executed.

According to Bashiru Olanrewaju, president, National Union of Local Government Employees, NULGE, Oyo State chapter, successive administrations in the state have, since the inception of democracy in 1999, had to dip their hands into the local government purse, thus making it difficult for the councils to live up to expectation in respect to project execution. Such deduction of local council funds come in different ways and guises, such as through payment of primary school teachers’ salaries, state and local government joint projects and provision of infrastructural facilities, or through collaboration which give room for the mishandling of local government funds. After such deductions are made, the remaining amount is then handed over to the local governments to execute their own programmes and policies.

But that is not the only challenge confronting local government councils today. Some state governors have equally been accused of planting or sponsoring their stooges to become chairmen. This is to make it easier for them to continue to have access to local government funds. The idea is that, by influencing the choice of a local government chairman, it would be easier to manipulate or have a say in how local government funds are deployed. In the event that they are unable, for some reason, to sponsor their candidate to the position of local government chairman, some state governors simply refuse to conduct local government elections in their states. That would then allow them to appoint caretaker chairmen, many of whom, as their cronies, owe allegiance to their godfather governors rather than the people at the grassroots. That way, the serious work of governance at the local council areas is reduced to a “job for the boys, a real joke.”

To quote a head of service in Akwa Ibom State, when a governor influences or plants a transition chairman, “they have no voice of their own.” The consequences of such scenario is better left to the imagination. “So, when people argue that local government funds should not be channelled through state governments, their argument makes sense.”

Section 7(1)of the constitution states that “…the Government of every state shall, subject to section 8 of this Constitution, ensure their existence under a Law which provides for the establishment, structure, composition, finance and functions of such councils.”

Many states are guilty of not doing the right thing, as far as establishing a local government structure is concerned. One of them is Anambra. Since the last 10 years, the state has not conducted a local government election. When critics of Peter Obi, governor of the state, raised the issue at a political debate involving the state’s gubernatorial aspirants two years ago, the governor retorted that the issue predated him. But what is indisputable is that Obi has benefited immensely, like his counterparts in other states where this anomaly exists, from the situation.

He has, since assuming the position of governor, used caretaker committees to pilot the affairs of the 21 councils in the state. According to a source, the system of local government control in Anambra today is “laced with corruption, incompetence and lack of democratic principles.” All efforts by Newswatch to speak with Dubem Obaze, Anambra State commissioner for local government and chieftaincy matters, proved abortive.

Such scenarios leave much to be desired and do not make for accountability. It’s also part of the reason why the local government centres are hardly considered to be models of good administration. Coupled with the paucity of funds, many of the local council areas lack basic amenities or facilities such as health centres, potable water and good sanitary conditions that would make living in such areas tolerable.

On the other hand, some local government chairmen have been accused of embarking on projects that have no direct bearing on the lives of the people. It says a lot about the relationship between the local government councils and the inhabitants of the areas that the people’s needs are not taken into consideration while planning projects.

In the study carried out by the Orderly Society Trust, “an overwhelming majority of the people interviewed (71.5 percent) said that needs assessment were never undertaken before projects were implemented by their local governments.”

In some instances, rather than focus on the collective good, some council chairmen choose to attend to specific needs of individuals. This explains why, at a seminar on local government organised in 2010, Abubakar Momoh, a political science lecturer at the Lagos State University, LASU, described much of what happens at the local government level as “tokenism,” a culture of pandering to individual needs rather than focusing attention on improving lives of majority of the people through provision of amenities.

It takes just a visit to the nearest local government area to see just what needs to be done in terms of provision of amenities. In Gudu and Wurno local government areas of Sokoto State for instance, basic amenities like water, electricity and roads are lacking. Uba Ahmed, an indigene of Wurno local government, told Newswatch that apart from the few structures erected at the council headquarters since its creation in 1976, no other development has been witnessed in the place. The only source of water for the people of the area is a dam built several years ago and which is no longer safe for drinking. According to sources, contracts for the construction of roads in some of the villages in the council were awarded by the Aliyu Wamakko administration, but to date, nothing has been seen. The only motorable road in the local government is the one built by the Attahiru Bafarawa administration. The general hospital which he also built is still lying fallow as it is yet to be put to use.

The Government Secondary School, Shehu Malami and Sabon Gari primary schools all located in the council area, are presently in a state of disrepair, while one of the schools whose roof was blown off by wind storm is yet to be fixed. Many villages in Gudu, a local government that shares border with Niger Republic, which is located in the desert part of the state, do not have access roads, electricity, health centres and schools. A source told Newswatch that the local government gets six million Naira monthly as its share of the allocation fund. The only means of getting water supply in the local government is by using donkey and motorcycles to fetch water from neighbouring villages that have dams. The general hospital at Wamakko, the home town of Wamakko, built by Bafarawa, has been abandoned.

Due to the absence of a functional health centre in the town, indigenes travel to as far as Sokoto, the state capital, to seek medical treatment. Newswatch learnt that the local government chairmen in the state rarely have a say in federal allocation due to them. Officials of the local governments who spoke to Newswatch said they were being coerced into executing state government conceived projects with the councils’ money which the state later takes credit for. Another source told Newswatch that some local government chairmen in the state capitalise on the joint accounts issue to illegally divert funds belonging to their local government.

That apart, “Wamakko, the governor of the state has too much influence on the local government chairmen and he controls their funds. And whatever he says stands, as the chairmen have no say and cannot oppose any policy of the state governor,” said one of them.

In Zamfara State, many of the local government chairmen were afraid to speak on the issue of local government funds. Newswatch, however, learnt that many of the local government chairmen operate from Gusau, the state capital, due to lack of basic amenities in their respective councils.

In Kano State, another vista has been opened in the controversial security financing as reports indicates that the local councils, not the state, are maintaining the security outfit in the state aimed at combating the Boko Haram sect. Rabiu Kwankwaso, through his spokesman, Halilu Dantiye, told Newswatch that the state was spending so much in trying to restore peace to the state following the January 2012 massacre by the Boko Haram sect. But it was reported that the state deputy governor who is also the commissioner for local government is the one co-ordinating the flow of funds as it concerns the local government allocations.

In Ebonyi State, Newswatch investigation shows that every state chief executive finds the state/local government joint account, irresistible and have dipped their hands into its coffers at one time or the other. In Ebonyi State, there’s an existing arrangement in which funds are lodged in the accounts of Joint Accounts Committee of Local Government Chairmen without the chairmen knowing the inflow and outflow of the accounts.

For instance, it was alleged that about N15 billion was fleeced from the Joint Account, between 2003 and 2006. A breakdown of the scam shows that between 2004 and the end of 2005, during the administration of Sam Egwu, N1.2 billion, being excess crude allocation due to the 13 local councils was concealed from the Joint Account Committee.

Judging by a petition sent to the presidency in 2007 by the Coalition for Good Governance in Ebonyi State, COGGES, while the Federal Allocation to the 13 local councils in 2004 was N831.741million, the state government allegedly distributed N738.849 million, leaving a balance of N92million. “In January 2005, the federal allocation was N793.032million whereas a little over N700m was distributed to LGA’s leaving Egwu with a net profit of about N93m. The figure for February 2005 was N776.298 million, whereas N683.403 million was disbursed, leaving Egwu with a balance of N92.895 million,” wrote the petitioners. Based on this, the petitioners estimated the looting of local council fund at N15 billion by Egwu during his eight-year rule.

In Enugu State, it is difficult to know how the state government distributes federal allocations to local councils. But Okechukwu Okoro, a staff of one of the local councils credits Sullivan Chime for helping to reposition the local governments.

John Nwankwo Anichukwu, chairman, House Committee on Local Government, Inter-parliamentary and Enugu State Independent Electoral Commission, ESIEC, matters, said his committee has never discovered any form of fraud in the local government administration since Chime became governor.

He, however, promised that his committee would waste no time probing any council chairman or governor if it discovers any form of fraud. “We have a committee on public accounts and corruption. Anything we discover in the local government administration that is not in tandem with the norm, including financial scam, would be looked into.”

In Imo State, previous administrations were in the habit of tampering with the Federal Government allocation to the local governments. For instance, the administration of Ikedi Ohakim, former governor of the state, was accused of fleecing the local governments of allocations through various frivolous means. Ohakim was said to have awarded fake contracts, and got approval by the Joint Account Allocation Committee, JAAC, to withdraw funds from the account whenever he needed money. The ex-governor easily got the support of local government caretaker committee chairmen to make many JAAC payments and illegal withdrawals from this account.

When the Imo Rural Road Maintenance Agency, IRROMA, was established, it became a conduit pipe through which local government funds were siphoned at the expense of the rural communities. Most of the Hilux cars and heavy-duty trucks purchased under the IRROMA project ended in the hands of contractors who did not even execute the job. The administration rendered the local government council powerless. According to a source, there is no state in the East where the massive looting of local government fund was more prevalent than in Imo State. The State government under Ohakim only remitted money for salaries and allowances of the workers.

The situation is said not to have changed with the present administration. Irked by the undeveloped nature of the 27 local government areas of the state, members of the National Union of Local government Employees, NULGE, last week took to the streets of Owerri. The protesters later besieged the office of Gerry Okoli, commissioner for local government and chieftaincy matters, where they demanded to know why their salaries and allowances were not paid. They also sought to know why the local councils were still in a shambles despite the huge federal allocations the councils supposedly receive monthly.

To avoid further plundering of local government funds, Rochas Okorocha, governor of the state, recently introduced what he called the fourth tier government to help develop the rural communities. This tier of government comprises the traditional ruler, president-general, woman leader, youth leader and the community speaker of each autonomous community. “He believes that under this arrangement, local government funds would be more judiciously used to develop the rural communities because the people of the area will be involved in the appropriation of the fund,” said a source.

Jude Agbaso, deputy governor, told Newswatch that the new concept would help stem the embezzlement currently ravaging the local councils.

To some observers, the best way of accelerating development at the grassroots level is to grant autonomy to the local governments councils. Uche Ekwunife, House of Representatives member from Anambra State, believes it is the right thing to do. That explains why, last year, she sponsored a bill seeking autonomy for local government councils. The bill is yet to scale the hurdles to become a law.

Abdullahi Dogo, a social commentator, would love the bill to come to fruition as he believes that the joint account of states and local governments has robbed the grassroots people of the much desired good governance.

Saheed Lekan Popoola, chairman of Offa Local government wants the National Assembly to expedite action on the matter of financial autonomy for the local governments as it is crucial to getting things right at that tier of government.

Ibrahim Gidadu, a former commissioner of information in Sokoto State under the Bafarawa administration, said the governors have refused to allow the local governments to be autonomous because of what they are benefiting from the current arrangement. He noted that the move being made by the National Assembly to amend the constitution in order to remove the local governments from the grip of the governors is in order. According to him, granting total autonomy to the third tier of government will make them perform better and as well bring development closer to the people. “Without total autonomy, the local governments cannot perform,” he said.

Adetunji Oyebolu, former chairman of Surulere local government area of Lagos State and chieftain of Action Congress of Nigeria, ACN, believes that, for long, “too much power has been concentrated in the centre making the federating units too weak to perform their statutory obligations” and unless the problem is addressed by giving more powers and resources to the local councils, they would not become what they are meant to be.”

Not everyone, however, considers the idea of autonomy great. Kehinde Bamigbetan, the chairman of Ejigbo Local Council Development Area of Lagos, said such a bill could create crisis between the house of assembly and the local council. “It doesn’t make sense; there must be some level of checks and balances between the tiers of government. While the state and central government are parri passu, the local governments are under the states; they are subsidiary so there’s no need being carried away by what does not exist. What is important is that the local government is created for development. If you are developing your area, you will be advancing the interest of the state because the state will benefit from it. That’s my position on that. I don’t support the issue of autonomy.”

On his relationship with the Lagos State governor regarding local government funds, Bemigbetan said it is “impressively democratic.” He added that the collaboration that exists between the state and local government is “based on agreement, not by fiat” and that “any ministry in the state that wants to do anything that requires local government fund will come to JAAC and present, and if we think it will pay us, the local government will give you money; if we think it’s not worth it, we say sorry, we don’t need it.”

But, the verdict of many people regarding the performance of local government chairmen or council, is dismal, to say the least.

“I want to say with every sense of responsibility that the local governments in Nigeria have fallen short of the set objectives. Government at that level has been so incompetent; it has been most unhelpful to the people because majority of people that have been brought to occupy that position in executive capacity as chairmen are not people who have emerged as the popular choices of the people within their areas.” said Matthew Urhoghide, the Edo State Secretary of the People’s Democratic Party, PDP. He added that, “there has not been any obligation to the people from them because they have not had any social contact with the people and as such have not been able to deliver any promise to the people and that is why the local government has not been able to meet with the challenges of the people.”

Although some local government chairmen may plead paucity of fund as their reason for not living up to expectation, one analyst believes that with proper accountability, they still should be able to justify what they get. “The corruption at that level is increasing, especially in terms of how money is shared every weekend. Local government levels have not been properly monitored in terms of how money is being shared every weekend. Most of the revenues collected by the local government councils is either siphoned or diverted into personal accounts.”

For Bertrand Okoro, a civil servant, “my wish is for accountability and transparency within the local council set up as the absence of this is the reason why the local governments don’t work.”

Reported by Tobs Agbaegbu, Obong Akpaekong, Dike Onwuamaeze, Victor Ugborgu, Annette Oghenerhaboke, Balogun Gbolahan, Chimezie Enyiocha, Augustine Adah, Sule Elaigwu, Anayo Ezeugwu and Yinka Adeniran