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Direct allocations to LG: Governors fail to block NFIU in court

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Nigerian Governors have again failed in their bid to stop the implementation of guidelines issued by the Nigerian Financial Intelligence Unit (NFIU), directing banks not to allow transactions in States/Local Government Joint Accounts. The governors, under the auspices of the Nigeria Governors Forum (NGF), sued the NFIU challenging the legality of the guidelines.

The Federal High Court 2, Abuja presided over by Hon. Justice Tsoho in suit No. FHC/Abj/CS/563/19 declined a request by a counsel to the NGF to restraint NFIU from implementing the guidelines pending the determination of the suit. Justice Tsoho in declining said since it is a constitutional matter, he will not ”bother with interlocutory injunctions.”

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Meanwhile, lead Counsel to the NGF, Lateef Fagbemi, SAN, who was at the Presidential Election Petitions Tribunal, had initially applied for a standdown to 11:30 am to enable him to come and argue on the matter and was obliged.   But by 11:48 am, the matter was called up again, but another lawyer holding brief for him applied yet again for another 30mins stand down as his principal was still busy at the Court of Appeal.

Arthur Obi-Okafor SAN leading Prof. Deji Adekunle SAN for the NFIU, informed the Court that they ”had shown good faith by waiting for the Plaintiffs Counsel till 11:30 am, and there is no guarantee he will be through at the Court of Appeal if the matter is stood down for another 30 minutes”. He also informed the Court that they are already challenging the jurisdiction of the Court to hear the matter which has been served on all the parties.

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The lawyer holding brief for Mr. Fagbemi SAN for the Plaintiffs while not opposing an adjournment urged the Court to restrain the NFIU from proceeding with the enforcement of the guidelines, but the Court declined to grant the request. The Court after that adjourned the matter to October 23, 2019, to hear all pending applications

The NFIU had on May 6, 2019, issued ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria,’ which stopped governors from tampering with funds meant for local government areas. The guidelines took effect from June 1, 2019.