Nigerian Senate backs NFIU’s financial guidelines for local governments

Nigerian Senate backs NFIU’s financial guidelines for local governments

- Senate has backed the new financial guidelines for local governments released by NFIU

- The guidelines prevents state governments from making withdrawals from local governments’ funds

- According to the Senate, the guidelines will help fight corruption at the state level and help local governments grow

The Nigerian Financial Intelligence Unit (NFIU)'s new financial guidelines for local governments has received the backing of the Senate.

The guidelines which was recently introduced by the NFIU prevents state governments from making withdrawals from local governments’ funds.

Also, the guideline made it compulsory for financial institutions to deal with the local governments concerning the money accruable to them.

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“With effect from June 1, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, locally and internationally.

“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000 per day,” the statement read.

In backing it, the Senate said that the guidelines will help fight corruption at the state level and help local governments grow.

Senator Sabi Abdullahi who presented a motion on the development said the NFIU guidelines would reinforce the existence of local government as an independent government established by the Constitution at the grassroots level with sovereign and elected officials.

Meanwhile, Senator Jonah Jang submitted that: “In some states, the state government takes over the local government funds and abuse it. We have also witnessed local government chairmen signing checks at the beer parlours."

“If we succeed in executing this, 60% of corruption in Nigeria will be resolved.This will be a major landmark if the Senate decides to follow through its resolutions,” Senator Ibn Na’Allah said on his part.

Saraki added that: "Let all financial institutions agree, and all of us agree that we must follow these guidelines and let the local governments be autonomous.”

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Meanwhile, Legit.ng had reported that some state governors may lose control of local government funds from the federation account due to the new Nigerian Financial Intelligence Unit guidelines.

The guidelines stated that joint account system in place in most states will only exist for the receipt of allocations but not disbursement.

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