S/COURT Judgment: 462 LGAs in 22 states blocked from Federation Account

…senior lawyer Femi Falana diagnoses verdict – this is the beginning of a long-drawn
political/legal battle

Lagos lawyer, Mr Femi Falana (SAN),analyses, in this interview, the Supreme Court judgment which, last week, granted financial autonomy to local government areas (LGAs) in the country, saying, going by the verdict, 462 LGAs in 22 states run by Caretaker Committees will not get funds from the Federation Account until elected officials are in place. “Today, out of 36 states in the country, 22 governors have sacked local government officials and installed Caretaker Committees, contrary to the stipulation of Section 7 of the Constitution and the flagrant disobedience of several judgments of the court”, says Falana. Findings by Sunday Vanguard show the 22 states where Caretaker Committees are in charge of their LGAs include Rivers, Anambra, Imo, Kwara, Zamfara, Yobe, Ondo and Osun. Others are Akwa-Ibom, Cross River, Benue, Bauchi, Plateau, Abia, Enugu, Katsina, Kano, Sokoto and Jigawa. Delta State only yesterday elected Chairmen and Councillors into its LGAs. Meanwhile, the SAN, who spoke on a Channels TV programme, foresees a long-drawn political/legal battle arising from the verdict. Excerpts:

What is your take on the Supreme Court judgment on the autonomy of local government councils?

I have been part of the struggle for public accountability in the country. So, the judgment would advance the struggle for public accountability in Nigeria if Nigerians were prepared to monitor the activities of local government officials and Federal Government officials. That is the only way we can have political stability and security in our country.

Why must the case get to the Supreme Court when the law is clear?

Well, this is one of the very rare public-interest litigations that the Attorney General filed in court, and it’s a good development because we operate in an atmosphere of impunity. There are several judgments to the effect that no governor has the power to dissolve elected local government, but that occurred on a regular basis. Today, out of 36 states in the country, 22 governors have sacked local government officials and installed Caretaker Committees, contrary to the stipulation of Section 7 of the Constitution and the flagrant disobedience of several judgments of the court. Again, the Nigerian Bar Association has not put in place a mechanism for dealing with lawyers in public office who defile the Constitution or who fail to give appropriate advice to the federal and state governments.

But is the Constitution or any of our laws ambiguous?

There are laws that are ambiguous, but not this one. The local government autonomy provision is clear, and every lawyer is aware of Section 7 of the Constitution to the effect that the system of local government in Nigeria shall be by democratically elected councils. Unknown to most Nigerians, Section 7, Subsection 6, provides that in every state, the House of Assembly shall make a law to facilitate the allocation of funds from the state government to the local government, apart from the allocation from the Federation Account. The state government is also required under the Constitution to give money for the development of local government, which is why funds from the Federal Government should pass through a Joint State and Local Government Account. Furthermore, Section 7 provides that in every state in Nigeria, the House of Assembly shall make a law to enable local government to participate in the economic planning of the state, and, in fact, there shall be an economic board in every state that involves state and local government officials, but this provision is ignored by state governors. What the Supreme Court says in effect of Section 162 is that the money is being diverted. The money gets to the joint account but never gets to the local government. The Supreme Court has now ordered that henceforth the money shall go to the local government.

In other words, you mean the Constitution has to be reviewed to take effect?

No. Once the Supreme Court has made the pronouncement, that is the law. The Constitution says local government officials shall be elected, but we now have 22 states populated by unelected, handpicked Caretaker Committee officials. The Constitution also says the statutory allocation of the local government shall be paid to the local government through the Joint State and Local Government Account, but the money paid to the state or local government account disappeared, was cornered, or was diverted from the account. It never gets to the local government. In fact, I will give an instant: a few years ago, the London/Paris Club funds were paid to local and state governments. The refund to local governments never got to states. So, governors gathered and directed the Accountant-General of the Federation to pay the money to nominated accounts. I know the EFCC is investigating the diversion. So, it is not in the interest of governors or our country that money meant for development is diverted.

But are you aware of the former governor of Delta State, James Ibori, saying the Supreme Court judgment is a setback to the principle of federalism? What do you think he meant by that?

With profound respect to Chief James Ibori, I think the argument is a bit contradictory. In the 1950s, nobody was going to Abuja to collect money. Every region depended on its own resources and can be described as the golden era of cocoa production in the West, groundnut in the North, and palm kernel in the East. But, today, everybody goes to Abuja. So, for me, it’s distorted federalism. You can’t collect money from the central purse; money meant for the development of the Niger Delta when it gets to you, and for you to send it to the local government you divert it, you then realize it’s a setback for federalism. So, it is contradictory.

But you don’t see the judgment as interference in local government administration by the Federal Government because the supervisory authority is vested in the House of Assembly?
No. The House of Assembly shall make the law for their administration and finance, among others. The local government was created by Decree 24 of 1999 otherwise called the 1999 Constitution. When it suits members of the political class, the Constitution is a beautiful document, but when you are asked to practicalize it, we then remember that this is not true federalism. What is important at the end of the day is how to account for the resources of the country.

So, what is the accountability infrastructure for the local government like?

The judgment is the beginning of a long-drawn political and legal battle. Like I said earlier, out of 36 state governments, 22 have caretaker committees appointed by governors. So, nothing stops members of the committees from returning to the governors and asking what to do with it. In the remaining 14 states, the elections conducted by state electoral commissions are the worst in Africa. Today, no serious member of the opposition participated in local government election because the results are already known, pre-determined. The candidate of the ruling party, be it chairmanship or councillor, would be declared winner just to ensure that nobody raises a query at the end of the month when the money comes. I think this is an opportunity for Nigerians to reposition themselves to ask questions at the grassroots level. If the chairman wants to risk his liberty by handing over money to somebody, it’s too bad for him because, at the end of the day, he or she would be held to account. That is why Nigerians must take advantage of the judgment of the Supreme Court to begin to ask for the budget of each local government, the disbursement of funds after the payment of the salaries of workers, and what happens to the remaining money. Because we only discuss the budget of the local government, we don’t discuss the budget of state governments, including Lagos, which is set to be the 5th largest economy in West Africa, or local government. So the judgment is a challenge to Nigerians to demand the budget of 774 local governments in Nigeria. Secondly, I expect that because the judgment is with immediate effect, what that means is that the official of ALGON is to collate the accounts of 774 local governments and submit them to the Accountant-General of the Federation so that, with effect from the end of this month, money meant for them would go directly to them.

What then happens to the provision of Section 162 which talks about the creation of state and local government joint accounts, if the Federal Government is paying directly to local governments?

This battle started in 2004 when President Olusegun Obasanjo ordered that Lagos funds be confiscated on the grounds that the Bola Tinubu administration created new local governments, and the state government stood its ground and won the case. The court ordered that the president has no power to order the confiscation of the newly created local governments, but the judgment didn’t say that the state government has the power to seize the money. Again, in 2005, the National Assembly made a law for monitoring local government funds in the country by appointing monitoring committees. States went to court, and the Supreme Court said the Federal Government has no power to monitor funds meant for local government because local government is democratically elected. What we have had this time is that since 1999, money for local governments has been diverted in majority of the states in the country. So, this was what informed the decision of the Federal Government to ask the Supreme Court to intervene, and since the Supreme Court has intervened, it is now left for the Nigerian people to actualise the terms of the judgment for the benefit of our people.

Is the money still going to that joint account?

No. The Supreme Court is saying the money was not supposed to sit in the joint account. It was supposed to pass through the joint account. If you read Sections 162 and 7 of the Constitution, the money given to the local government by the state government should also go to the same account, but the state government does not allocate any money to the local government. So, what is the purpose of putting that money in the joint account? Hence, the Supreme Court has said that, having regard to both Sections, the local government shall henceforth have their money directly from the Federation Account.

I hope it won’t interfere with local governments dealing directly with the Federal Government, especially when it’s not the ruling party.
No. That would not be possible. As I said, there are two judgments, the Attorney-General of Lagos State and the Attorney-General of Abia State, against the Federal Government, where the Supreme Court ruled that the Federal Government cannot touch the money for local government. What is going to happen is that the Federal Government would decide what should go to local governments, and money meant for local governments would be paid directly, not that the Federal Government would have the power to seize or divert the money. When you look at Section 162, Subsection 6, it creates a Joint State/Local Government Account. Once the money gets to that account, it will be paid to local governments. It does not say it should be spent or diverted at the joint level but shall go to the local government in line with Section 7 of Section 162 of the Constitution.

Some people are of the opinion that the state government would be at a loss at the control level; what is your take on that?

As the system is structured, it is difficult to talk about the autonomy of local governments. States independent electoral commissions are manned by appointees of state governors, and what they have done over the years is manipulate the local government in a way that only candidates of the ruling party would be declared winners, or as it is today, where elected officials are dissolved and a caretaker committee is appointed. Part of the judgment is that whenever that happens, money meant for the local governments will not be given to such local governments. The state or local government would have to have some joint programs in the interest of the people. The state government is still going to decide what the educational policies of that state are about, and the local government would be expected to feed some schools, tar some roads, and even pay workers. I think this is an opportunity for the state government to take advantage of Section 7, which provides that there shall be an economic board in every state to enable local governments to participate in the economic affairs of the state… just as state governors are members of the economic council, because that body doesn’t function, the IMF and the World Bank not only advise the government but also impose their economic agenda on the country. So, the judgment has to be studied by governors, local governments, and even the Federal Government so that everybody will appreciate what the Supreme Court has done to promote public accountability at the grass-roots level.

What impact would the judgment have on security?

Again, local governments would be held accountable in many areas, as they can no longer throw up their hands like Pontius Pilate because you have to take care of security at each local government. While this is going on, the federal and state governments have also agreed on state police, and the local government is expected to contribute some funds. So, there is no way local governments would feel free to do whatever they like. I want to suggest that state governments have no business quarreling with the judgment. What they should do is intensify the struggle for a new revenue allocation formula that would allow them to have more money from the Federation Account.

Governor Fintiri of Adamawa accused the Federal Government of not disbursing all the funds (from Federation Account); isn’t that the same thing the state government is being accused of?

Governor Fintiri is right, but I have challenged state governors in Nigeria to adjudicate their responsibilities to the Federal Government. For instance, there are federation companies in Nigeria like LNG and NPA, and the state governors have allowed the Federal Government to manage these institutions. In December 2018, the then Director-General of Budget, Ben Akabueze, disclosed that CEOs of Federal Government parastatals withheld N10 trillion, but today that money would have gone beyond N20 trillion. There was a time I went to court when I could not persuade state governments to insist that the money collected from Expatriate Fees was $2000 per expatriate in Nigeria, totaling about N40 billion, but state governments were not interested in what happened. The Federal Government takes 30 per cent, the Ministry of Interior 7 per cent, Immigration 5 per cent, that is 42 per cent, and the remaining 58 per cent goes to a contractor who is a foreigner. What does he do? Nothing rather than to say pay this money to a Federal Government account. I went to court and won the case in 2019. I had been persuading state governments, and the Federal Government filed an appeal. The other one was in 2018 when the Supreme Court ordered the Federal Government to recover royalties not paid by IOCs for 18 years. Rivers, Akwa Ibom, and Bayelsa state governments went to court and judgment delivered in October 2018. Then Buhari administration set up a committee, the money was about $62 billion. When the Federal Government was not willing to collect the money, Governors Wike and Emmanuel Udom went to court, and the court ordered that $3.1 billion should be paid to the two state governments by the Federal Government, and other state governments were not bothered. So, state governments must sit down to campaign for financial autonomy. In the ongoing dispute between Dangote refinery owners and IOCs, if we can have our own refineries in Port Harcourt, which we were to have commissioned in December according to the President, and Warri and Kaduna commissioned this year, if these refineries are working, Dangote refinery is working, and they can get crude to be refined in Nigeria, the money being spent on importation of fuel would be banked, and there would be more money in the Federation Account in the interest of all of us. That is why state government would have to be more proactive with respect to the management of the Nigerian economy.

Would you say the with the judgment, the restructuring of the federation has started?
It is not just starting. I think since 2001, the restructuring of the country, through litigation, has started. In fact, for the cases that have been won in court, some state governments may have gone bankrupt by now.

But how significant is the judgment in the process of restructuring?

Under the current political dispensation, there are three tiers of government: Federal, state, and local. This judgment has now re-enforced the autonomy of the local government. What I am saying is that state governments have gone to court to challenge the conduct of local government election by the Federal Government, and the court has said it’s the business of the states. State governments have gone to court on behalf of local governments, and the court said the Federal Government should not torch local government funds. Lagos government went to court on the physical planning of the state, and they won, so state governments have, through these cases, improved their own economy.

With the judgment, how do you see local government elections going forward?

It will require our going back to the report of the Justice Muhammad Uwais Panel. It recommended that members of electoral bodies in Nigeria be appointed through advertisement, and those shortlisted would go through a body that would recommend them to the House of Assembly. In other words, in the interest of all of us, we must have independent electoral commission both at the state and federal levels.

SOURCE: VANGUARD