Court okays direct allocation to LGA

Federation Account Allocation Committee (FAAC) as from June 1, 2019 will begin direct allocation to Local Governments across the federation following the decision of a Federal High Court, sitting in Uyo, the Akwa Ibom state capital on Friday.

Justice A.A Okeke of the Court declined to grant the request of the Akwa Ibom state government to stop the implementation of the guidelines on local government funds issued recently by the Nigerian Financial Intelligence Unit (NFIU).

Recall that governors had kicked against the direct allocation to local government councils from the federation account.

The NFIU had, on May 6, issued the ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria’ which restored the full mandate of the operations of State/Local Government Joint Accounts to be used solely for the distribution of funds directly to the accounts of the local governments.

Banks were requested to ensure the full implementation of the guidelines with effect from June 1, 2019.

However, all Local Government Areas in Akwa Ibom state, alongside the state government through the Attorney General of the state approached the Uyo division of the FHC seeking to nullify the guidelines issued by NFIU in a suit filed with suit number FHC/UY/CS/88/2019.

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The court on Friday declined the request after listening to counsels from the state government and the NFIU.

The plaintiffs, who were represented by the State Attorney General (Uwem Nwoko SAN), also urged the court to grant a restraining order against the NFIU stopping the commencement of the guidelines on the 1st of June, 2019.

Learned silk, Arthur Obi-Okafor, SAN, who represented NFIU, challenged the locus standi of the plaintiffs and urged the court not to grant any order ”in favour of persons who are nothing but busy bodies”.

He informed the court that the matter is of grave national security concern and that the urgency raised by the plaintiffs is self-induced since the guidelines were released on the 1st of May, 2019.

The court adjourned the matter to 21st June, 2019 to hear all pending applications while declining to issue any restraining order.

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