Restricting withdrawal of funds from state and LG accounts is illegal – Senior Advocate | Jobs Vox


An Abuja-based constitutional lawyer, Mr. Sebastian Hon (SAN), has said that the Federal Government lacks constitutional support to restrict the withdrawal of funds from the bank accounts of states and local governments as proposed by the Nigerian Financial Intelligence Unit (NFIU).

Hon, in a statement in Abuja on Thursday, said that Nigeria, which has a federal system of government, cannot be included in the unitary system of government proposed by the NFIU.

“The Nigerian constitution created financial independence for the federal states, so that the federal government disburses money from the federal purse to the state governments, while the former no longer has the constitutional power to dictate to the states and local governments how such money should be spent. “

The senior lawyer held that the provisions of the Constitution do not make states and local governments appendages of the federal government.

He said the clarification was necessary following a statement by the Director, Central Bank of Nigeria (CBN), NFIU, Mr. Modibbo Tukur.

“Tukur said the federal government through the CBN plans to stop disbursement of cash from the accounts of the three tiers of government – ​​federal, state and local governments.

“The director said the CBN will operate under Section 1 of the repealed Money Laundering (Prohibition) Act, 2011, which has essentially been re-enacted and is now Section 2(1) of the Money Laundering (Prevention and Prohibition) Act. , 2022.”

“The reason, he said, is to curb money laundering, which occurs when government officials withdraw more money from these accounts than is allowed in the name of estaco.

However, the senior lawyer said that while the proposal sounded beneficial, Nigeria as a federal state should not be governed in this way compared to the unitary system of government.

“The history of our Constitution, which began with the 1979 Constitution, cannot bear this. I will determine it by the Supreme Court’s decision.

“The Attorney General of Bendel State v. Attorney General of the Federation (1982) 3 NCLR 1, 190, per Uwais, JSC, held without controversy as follows.

“Therefore, when the federal account is divided among the three levels of government, I think it will be their prerogative to have the state governments together become the absolute owners of the shares allotted to them, and generally exercise complete control over sharing.

“Therefore, it would be inappropriate for the federal government to manage stocks without the consent of the state governments.

“It seems logical and consistent with the basic federal principle of the autonomy of the constituent states.”

He said Nigeria is still a federal state and the 1999 constitution, the federal constitution and the constitution provides for a clear separation of powers between the federal and state governments.

“The range of powers and duties enjoyed by either of the two is limited, and neither of them has the right to exceed the limits set by the constitution for the other.

Hon said the federal government is trying to crack down on corruption and money laundering, but it must do so within the framework of the constitution.


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