FG cannot restrict withdrawals from state accounts, says constitutional lawyer
An Abuja based constitutional lawyer, Mr Sebastine Hon, SAN, says the Federal Government lacks constitutional backing to restrict withdrawals from the bank accounts of states and local governments as proposed by the Nigeria Financial Intelligence Unit )(NFIU).
Hon, in a statement on Thursday in Abuja said that Nigeria, with a federal system of government, could not be run in the way of a unitary system of government as being proposed by the NFIU.
“The Nigerian constitution has imbued the federating states with such financial independence that, once the federal government allocates money from the federation purse to the state governments, the former lacks the constitutional powers to order the states and the local governments on how such money should be spent.”
The senior lawyer maintained that constitutional provisions did not make states and local governments appendages of the federal government.
He said the clarification became necessary following a statement credited to the Director of the NFIU of the Central Bank of Nigeria (CBN), Mr Modibbo Tukur.
“Tukur said that the federal government, through the CBN, is planning to stop cash payments from the accounts of all the three tiers of government – the federal, state and local governments.
“The director said that the CBN will be acting pursuant to Section 1 of the repealed Money Laundering (Prohibition) Act of 2011, which is re-enacted substantially and is now Section 2(1) of the Money Laundering (Prevention and Prohibition) Act, 2022.”
“He said the reason is for the need to curb money laundering, which occurs when state officials withdraw more than permissible from those accounts in the name of estacodes.
The senior lawyer, however said that as salutary as the proposal sounded, Nigeria as a federal, as opposed to a unitary system of government could not be run this way.
“Our constitutional history, beginning with the 1979 Constitution, is intolerable of this. I will establish this with pronouncements of the Supreme Court – the highest of the land.
“In the locus classicus of Attorney-General of Bendel State vs. Attorney-General of the Federation (1982) 3 NCLR 1 at 190, Uwais, JSC held quite unassailably as follows:
“It seems to me therefore that once the federal account is divided amongst the three tiers of government, the state governments collectively become the absolute owners of the share that is allocated to them so that it would normally be their prerogative to exercise full control over the share.
“Consequently, it will be inappropriate for the federal government to administer the share without the authorization of the state governments.
“This appears to be logical and in keeping with the fundamental principle of federation on the autonomy of the constituent states.’
He said it was concluded that Nigerian was still a federation and the 1999 Constitution it operated, a federal one and the constitution provided a clear division of powers between the federal and state governments.
“The category of powers and roles either of the two enjoys is circumscribed, neither of the two is at liberty to overstep the limits the constitution prescribes for the other.
Hon said that in as much as the federal government was trying to curb corruption and money laundering, it must be done within constitutional limits.