Nigerian Financial Intelligence Unit sets new rules, denies Governors access to LG funds

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The newly inaugurated Nigerian Financial Intelligence Unit (NFIU), yesterday, banned banks, Governors,  public officers, and other financial institutions/stakeholders from tampering with the statutory allocations of Local Government Areas from the Federation Account.

This move is contained in a notice that was released by the NFIU, yesterday, about Local Governments’ financial guidelines.

Contents of the notice – The notice was titled: Guidelines To Reduce Vulnerabilities Created by Cash Withdrawals from LG Funds throughout Nigeria, Effective 1st June 2019. It is said to have been prompted by threats by the international financial watchdog to sanction Nigeria because of repeated financial abuse.

LGA allocations should go to their respective bank accounts –  The new law which is set to become effective from June 1st, 2019, states that all allocations to Local Government Areas should go straight to their respective bank accounts.

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“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.”

A limited daily cash withdrawal – The agency set a daily limit cash withdrawal of N500,000 for all 774 local Governments in the country. Any transaction above this stipulated amount should be done via cheques/e-transfer.

What this implies – This directive implies that each Local Government can now spend its funds judiciously without taking directives from Governors who have hijacked the monthly allocations of the third tier of government under the guise of State Joint Local Government Accounts.

Violation of the guidelines will not be tolerated – The NFIU warned that there will be consequences for violation of the guideline.

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“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.”

This is in line with what the country expects from the NFIU – This move is in line wit what the Nigerian Government expects from the NFIU in terms of corruption.

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