THE UNCONSTITUTIONALITY OF THE NIGERIAN FINANCIAL INTELLIGENCE UNIT’S DIRECTIVES ON LOCAL GOVERNMENT FUNDS

Abstract

The granting of financial autonomy to the local governments in Nigeria through the operation of the newly established Nigerian Financial Intelligence Unit (NFIU) is, perhaps, the first time genuine and creative step is being taken in the fight against corruption and in ensuring the existence of local government as a third tier of government. However, no matter how laudable such a policy directive may be, the truth is that it is patently illegal and unconstitutional as it is contrary to the positions of the 1999 Constitution. The 1999 Constitution of Nigeria under section 7(1) guaranteed the existence of the local government as a tier of government but the same Constitution did not actually guarantee the financial autonomy of local government by creation of the State Local Government Joint Account under section 162 where local government allocations are managed by the State government. The Nigerian Financial Intelligence Unit, by its 2019 guideline/directives on local government funds purports to bar state governments from directly accessing funds in the State Joint Local Government Account. The paramount consideration is whether it has powers to do so. The research employed a doctrinal research method and relied on primary sources and secondary sources such as statutes, case laws, textbooks, internet sources and journals and qualitative analysis for the development of the work. It was found that local government is still considered as an extension of the state's ministry. The study recommends that there is urgent need no amend section 7 and 162 (3) (4) (6) (7) and (8) of the 1999 Constitution of Nigeria which undermine the autonomy of local government as true tier of government in Nigeria so as to enforced NFIU directives on the issue of local government funds.