…as judge dismisses suit for lacking merit
Federal High Court in Abuja, on Monday, dismissed a suit filed by the 36 state governors to stop the Federal Government from monitoring their handling of Local governments’ funds.
Justice Inyang Ekwo dismissed the suit for lack of merit.
The 36 states had filed the suit through their Attorneys General and the Nigeria Governors’ Forum (NGF).
But the court struck out the name of the NGF as a co-plaintiff in the suit, ruling that the body lacked the locus standi to file such a suit.
In the suit marked: FHC/ABJ/CS/563/2019, the states had challenged the legality of the Nigerian Financial Intelligence Unit (NFIU) Guidelines, which came became operational on June 1, 2019.
According to the NFIU 2019 guidelines, the States/Local Governments Joint Accounts should be used only for receiving funds and subsequently transferring them to Local government accounts only.
The guidelines, which also limit daily cash withdrawal from the State/LG joint account to N500,000, the NFIU claimed are intended to reduce “crime vulnerabilities created by cash withdrawal from local government funds throughout Nigeria effective from June 1, 2019.”
Attorney General of the Federation (AGF), the NFIU and the Nigeria Union of Local Government Employees (NULGE) are listed as defendants in the suit.
The stated argued, among others, that the NFIU guidelines: known as “the NFIU Enforcement and Guidelines to Reduce Crime Vulnerabilities Crafted by Cash Withdrawal From Local Government Funds Throughout Nigeria,” 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.
Delivering his judgement, Justice Ekwo held that he couldn’t see where the guidelines contradict the provisions of Sections 7(1), (6) (a) and (b) of the Constitution.
He also held that the guidelines did not conflict with the provision of Section 162(6) of the Constitution, which creates the State Joint Local Government Account, into which allocations to the Local Government Councils of the state from the Federation Account and from the government of the state are paid.
Justice Ekwo further held that the guidelines did not contradict Section 162(8) of the constitution which prescribed that the amount standing to the credit of the local government council of the state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.
He further held that the provisions of the NFIU guidelines also do not contradict the provisions of the 4th Schedule to the 1999 Constitution, which prescribes the functions of a Local Government Council.
The judge held, “Duty of the court is limited to expounding the law and not expanding it. 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.”
He added that he found that none of the provisions in the NFIU’s guidelines had contravened the provisions of Sections 7(1), (6) (a) and (b), 162 (6), (7) and (8), and the 4th Schedule to the 1999 Constitution (as amended).
The judge said, “I also find that the case of the plaintiffs has not been established and I so hold.
“I find, in the end, that the case of the plaintiffs lacks merit and ought to be dismissed and it is hereby dismissed.”
