25 February 2013

Nigeria: RMAFC Seeks Abolition of State/LG Joint Account

For the first time, the chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Engr Elias Mbam, has supported the abolition of the state /local government joint account in the next constitution review.

Mbam, who spoke to journalists at the weekend in Minna, declared that some of the state governors have defeated the aim of the joint account by trying to be "smarter than the constitution".

Mbam therefore advocated direct release of local government funds to them instead of a joint account that makes them be at the mercy of the state governors, adding that the local government councils are treated as a federating unit.

"Since some people have decided to be smarter than the constitution, it is better to revisit the constitution and change the clause about the state/local government joint account," he declared.

The chairman of RMAFC stated that the abuse of the state/local government joint account worries all Nigerians and that the situation can only be reversed through constitution amendment.

"There have been allegations that local government and state joint account have been abused by some state chief executive officers. The commission has stated that the joint account should be abolished. Local governments should get their fund directly from the federal government; but this will require the amendment of the constitution," he said. "The issue of joint account has continued mainly because it is stated in the constitution. The constitution, when it was drawn, was done with good intention because it was supposed to be one of the tools of development, but now it's been greatly abused. The account was done so that it would be increased before sharing and not for state government to reduce it before sharing it."

The chairman, who also spoke on theb high cost of governance, admonished state governments to diversify their resources in order to generate more revenue to help offset some of the overhead costs, while receipt from the federation account should be channelled to infrastructure development.

"If they are not able to generate the cost of their governance, they should force themselves to reduce it. The state governments should cut their coats according to their size; cutting of the cloth should be in line with the size of the cloth you have," he said.

There has been a longstanding agitation by local governments in the country. They are seeking an amendment of the constitution to grant them fiscal autonomy, in order to check wanton abuses by state governors such as delay in release of funds to the LGs, wanton and arbitrary deductions by states and utilisation of the provision as a suppressive tool by some governors On the other hand, the state governors have been clearly against the move, insisting that it would give rise to local governments having too much powers.

However, the bill for the amendment of the constitution to that effect has already passed the second reading at the Senate and it is expected that it would sail through at the end of the day.

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