Local government workers in Abakaliki, Ebonyi state, protesting absence of autonomy in the local government system. Photo Credit: Daily Post

Nigeria’s joint-account system has been an elite consensus against the rural poor, writes Awwal Abubakar.

The State Joint Local Government Account System (SJLGAS) was created by Section 162 of the 1999 constitution of the Federal Republic of Nigeria. According to the constitution, SJLGAS was created to facilitate development of the rural areas through effective supervision of the distribution and efficient management of revenue accruing to the local government councils from the federation account. 

Operation of joint accounts between local and state governments in Nigeria has created an array of problems for the latter even though it shoulders the largest percentage of the country’s population and also produces most of the food it consumes and exports.

But two decades after, the system has rather made rural sustainable development a mirage in the country. And that is because it allows excessive and unwanted deductions of fund statutorily accrued to the third tier of government from the federation by state governments through the Joint Account Allocation Committee (JAAC). SJLGAS also engenders improper management of finance and endemic corruption in the local government administration.

Implication on rural areas

Operation of joint accounts between local and state governments in Nigeria has created an array of problems for the latter even though it shoulders the largest percentage of the country’s population and also produces most of the food it consumes and exports.

According to a senior lecturer at the Department of Accountancy, University of Nigeria, Enugu Campus, Dr. Robinson Ugwoke, the first implication of the system is corruption and mismanagement of funds. 

He said, “corruption is one of the major problems facing the local government administration and rural development in Nigeria. In fact, a mere mention of the local government exudes corruption. The council officials are always in the manner of crying about short of funds to execute meaningful developmental projects, but are in the habit of buying most expensive cars, live flamboyant and ostentatious lifestyle at the expense of the people’s welfare. Every month, billions of Naira are allocated to the Local Government from the federation account and state/local government Joint account, but there seems to be no impact on rural developments because joint account allocation system created room for corruptions, as administrators of local government councils hide under complaint of deductions of funds by state government, to loot their own funds.” 

The lecturer is also of the opinion that SJLGAS robs the rural areas of the skilled manpower that would have brought about development. 

He further stated that, “Majority of both administrators and financial managers in the local government are not academically qualified to man such positions. politicians have seen local government as a place for political patronage to their loyal followers. Elections are never conducted to allow the grassroots people choose who should govern them and ensure the needed rural developments are guaranteed. More so, appointments as Treasurers are based on favouritism and not on professionalism or merit. This encourage mediocrity and poor performance, thereby hindering rural development.”

Thirdly, the university don lamented that joint account system brings about lack of civil society participation. He noted that the “participation by the well-meaning public is highly limited especially, the organized civil society and non-governmental organizations to monitor the use of local government funds. This may have been due to high level of rural illiteracy and poverty rate. There are no laws that encourage civil society to get involved in the participation, and even when they want to be involved, the local government administrators hide information that may be needed.”

Ugwoke further noted that state governments’ interference undermines the powers of the local government councils to enhance rural developments. “The councils are not given the needed financial autonomy and independence as practiced in true federalism,” he said.

Constitutional quandaries 

Since SJLGAS is enshrined in the constitution, to have it abolished, the constitution has to be amended. As the constitution legalising it became operationalised in 1999, it did not take long before hues and cries about it became mainstream. Consequently, Nigerians expected its abolition when another Assembly came on board in 2003. Another came in 2007, 2011, 2015, and the country is barely a year into the life of another, yet the abolition has not been achieved through the amendment of constitution.

In 2016, people were hopeful that the Bukola Saraki and Yakubu Dogara-led eighth assembly were going to achieve it following the latter’s chat with reporters in November 2016, saying SJLGAS was “among the evil hindering Nigeria’s progress.”

Bukola Saraki and Yakubu Dogara-led eighth National Assembly said SJLGAS was “among the evil hindering Nigeria’s progress.”

The then Speaker of the House of Representatives said, “As a matter of fact, joint account is one of the biggest evils because it gives the authority to local government ministries in the state. In most states, especially in the north where we don’t have oil and co, the ministry of local government in the state is regarded as the ministry of petroleum resources. We all know when funds are allocated to the councils. Instead of getting to the councils, they are hijacked at that level and appropriated according to the whims of the powers that be.”

At the time that Dogara spoke, a bill for the constitutional amendment of the system was ‘flying’ at the national assembly, but nothing was later heard of it until the 8th Assembly ended in May 2019.

Five months after its inauguration, a bill to amend the constitution to achieve financial autonomy for local government councils landed in the 9th Assembly which is being led by Ahmed Lawan and Femi Gbajabiamila respectively.

Sponsored by Senator Rose Oko (PDP, Cross Rivers State), the bill prays “each local government council is to create and maintain its own special account to be called Local Government Allocation Account into which all allocations due to the local government council shall be paid directly from the Federation Account and from the government of the state.”

While it first landed at the Senate, in February almost the same bill landed at the House of Representatives. It was titled “A Bill for an Act to Further Alter the Provisions of the Constitution of the Federal Republic of Nigeria, 1999 to Provide for the Financial and Administrative Autonomy of Local Government Councils and Uniformity of Tenure across the country”.

Leading a debate on its general principles, its sponsor, Mansur Soro (APC, Bauchi) stated that it seeks the administration and financial independence of the Local Government Councils to ensure development gets to the grassroots, empowers the people and eradicates the constraining reasons for rural to urban migration.

He noted that this is needed since the situation as it now makes the local government councils are stifled and at the whims of State governments.

Soro decried the gross mismanagement of local government funds which has caused extreme poverty in the Local government councils, the rise of insurgency and insecurity, as well as the high turnover of political office holders every four years, as the people express lack of faith in their representatives.

But experts are worried that the National Assembly may eventually frustrate it, going by what transpired in the past.

For a constitutional lawyer, Hadiza Musa, “People should not be deceived by the flowery words the lawmakers spew about the bill at the chambers. Going by the precedence, it could eventually be thrown away when their friends enjoying the status quo contact them and give them their own share. I am not expecting anything positive.”

FG’s Botched order

An agency of the federal government, the Nigerian Financial Intelligence Unit (NFIU) barred banks from allowing transactions from State Joint Local Government Accounts (SJLGAs) without monies first reaching a particular local government account.

A statement issued by NFIU, said from June 1, 2019, any bank that flouted the directive will be sanctioned 100 per cent locally and internationally. 

NFIU said new a set of guidelines to reduce crime vulnerability created by cash withdrawals from local government funds throughout Nigeria has been released to Central Bank of Nigeria, Economic and Financial Crimes Commission, Independent Corrupt Practices Commission and Chief Executive Officers of all banks and financial institutions. The Unit said the joint account system was meant “as a collection account,” meaning that “the amount standing to the credit of the local government councils of a state shall be distributed among the local government councils of that state” and not for other purposes.

“Cash withdrawal and transactions from State Joint Local Government Accounts poses biggest corruption, money laundering and security threats at the grassroots levels,” NFIU stated.

State governments, however, opposed the directive government did not heed, relying on a court injunction.

Nigeria’s Secretary to the Government of the Federation, Boss Mustapha, says joint accounts have become inglorious. 

In September 2019, the federal government said it was committed to bringing the system to an end through constitutional means. The Secretary to Government of the Federation, Boss Gida Mustapha, spoke at the Nigerian local government summit 2019, organized by SEGNIP Promotions Limited and the Department of State and Local Government Affairs, Office of the Secretary to the Government of the Federation (OSGF) with the theme: “Emerging Issues in Local Government Administration in Nigeria”. 

Mustapha, represented by the Director Special Duties OSGF, Mr. David Attah, said that the age of joint accounts had become inglorious within the political system. 

According to him, one of the major areas of friction was the state and local government accounts which was being grossly abused, igniting serious agitation for the fiscal autonomy. He said that for the local governments, the states have generally starved them of needed funds to discharge their statutory responsibilities and embark on developmental or innovative programmes and projects. 

He said, “After so many ruinous years of our recent past, we certainly cannot live with the continued mismanagement of public funds (joint-account) any longer. Most of us know too well the dangers and consequences of this sustained degradation of our local government system which manifest in increased wave of crimes and social maladies like terrorism, kidnapping, cultism, neighbourhood gangs, human trafficking, baby factories, dilapidated primary schools and primary health facilities, influx of youths to urban centres and pernicious rural poverty which have dovetailed into various dimensions, agitations, and unrests. 

“More so, it is uncanny that most of us fail to see the connection between moribund local governments and Boko Haram insurgency, for instance. Suffice to say that no ‘baby factory’ or incidence of kidnapping would find space where local government councillors are fully involved in governance and work with landlords’ associations and town unions. In the midst of all these, there is no state, not even one, that showed example by devising a system that made the local governments work or gave proper account of the local government funds. All of us, directly, or tangentially, are exposed to the impact of local government administration daily. Therefore, mismanagement and maladministration at this level of governance will connote impacting negatively on our people with direct implication for banishing a large number of the population to abject poverty and penury.”

Hypocritical state governors

The hues and cries on state – local governments joints accounts system started to rise not long after Nigeria started to use the constitution that birthed it. 

For Dr Abdullahi Manu, a senior lecturer in the Department of Political Science, University of Abuja, ever since it was understood that the system won’t foster development at the council level, calls of its abolition through the amendment of the law that created it have always been loud. But something as simple as constitutional amendment has been elusive and will continue to be elusive. In other climes, if a law or a system is not working, they promptly do something about it. Reverse has been the case in Nigeria, and that is because some powerful people are enjoying it.”

Pressed to be specific on “the powerful people, the political scientist stated that: “State governors have been the ones frustrating it. If the federal government gives money to the councils directly, the gods they claim in their various states will come to an end. They won’t have the money to control people the way they have been doing.”

Mansur Manu Soro says state governors are to blame for setbacks in actualizing local government autonomy.

To amend the constitution, the ball is in the court of the (federal) lawmakers, hence it is baffling that experts always ideate that “it is the fault of the state governors.” For Manu, “yes, the state governors are the problem. Apart from having strong influence in the National Assembly, determining for them what to do or not do, they disregard executive orders. When NFIU gave an order last year, did they heed? When the presidency recently ordered that state judiciary and legislature be autonomous aren’t the state governors currently working to frustrate it? In the end, they will win. Mark my words.”