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 Daily Independent Online.
* Monday, July 26, 2004.
Bill on revenue allocation to LGs and area councils (Federation Account, Etc.)
This bill, though very short,
is a controversial one because of the dust it has raised in recent times.
Because of the various misgivings, the House of Representatives
Committees on Justice, Judiciary and States and Local Government Affairs,
organised a public hearing to ascertain whether the National Assembly has
the right to make a law that will create State Local Government Joint Account bearing in mind
the provisions of the Constitution.
Again, the hearing, according
to the panel chairman, Alex Nwofe, was also to determine the right and
limit of the National Assembly and to look at the bill critically to
decipher if what it hopes to achieve is contained in it.
To underscore the importance
of the bill, Speaker Aminu Bello Masari said in looking at the bill, the
National Assembly must be guided by history of what had happened before
especially when it passed the bill extending the tenure of local
government officers. He asked if the consideration of the bill by the
parliament now is timely.
Masari, however, urged all participants
at the hearing to look at the fundamental issues raised in the bill and
avoid sentiment while discussing it since the bill is a very popular one
that will go a long way to erase insinuations that local governments have
not performed very well. Besides, the bill, he said, is primarily aimed
at safeguarding public funds.
Adding a critical dimension to
the controversial bill, a one-time Secretary of the Association of Local
Governments of Nigeria (ALGON) and now a member of the House of
Representatives, Ralph Okeke, said the bill would curb the misuse of
funds meant for the local councils. His words: “If the money meant for
local governments does not get to them, it is bastardisation. It has come
to the situation where we make this law and sanitise the system.”
Explanatory
Memorandum
This Bill seeks to provide for
the formula for the allocation of the amount standing to the credit of
the local government councils and area councils in the Federation Account
as well as to prescribe the proportion of the total revenue of the states
and the Federal Capital Territory to be paid to the local government
councils and the area councils in accordance with the provisions of the
1999 Constitution.
The Bill
Be it enacted by the National Assembly of the Federal
Republic of Nigeria as follows-
Section 1.
Establishment of the State Joint Local Government Account and the Federal
Capital Territory Joint Area Council Account
There shall be established-
(a)
by each State of the Federation, a State Joint Local Government
Account; and
(b)
by the Federal Capital Territory, a Federal Capital Territory
Joint Area Council Account, into which all monies allocated from the
Federation Account to the local government councils and area councils, as
the case may be, shall be paid.
Section 2. Formula for
allocating to the states and the Federal Capital Territory for the
benefit of their local governments and area councils.
The amount standing to the
credit of the local government councils in the Federation Account shall
be allocated to the states and the Federal Capital Territory for the
benefit of their local government councils and area councils using the
following formula-
(a) Equality 40 percent
(b) Population 30 percent
(c) Landmass/Terrain
10 percent
(d) Social Development Factor 10 percent
(e) Internal Revenue Effort 10 percent
Section 3. Rendering returns
on quarterly allocation to the Accountant-General of the Federation, etc.
(1)
Any allocation due to any government council including area
council from the Federation Account in any quarter of a financial year
shall not be released unless the allocation of the previous quarter has
been accounted for to the satisfaction of the Accountant-General of the
Federation.
(2) Any allocation mentioned in subsection (1) of
this section not released during the financial year shall not be released
after the end of that financial year but shall be mopped up and credited
to the Federation Account.
Section 4. Proportion of total revenue of a state or
the Federal Capital Territory to be paid to the local government councils
and area councils.
In addition to the allocation made from the Federation
Account under section 2 of this Act to the local government councils and
councils, there shall be paid by-
(a)
each state of the Federation, in each quarter of a financial year,
the sum equivalent to 10 percent of the total revenue of the state for
that quarter into the State Joint Local Governments Account for the
benefit of the local government councils in that state; and
(b) the Federal Capital Territory, in each quarter
of a financial year, the sum equivalent to 10 percent of the total
revenue of the Federal Capital Territory for that quarter into the
Federal Capital Territory Joint Area Councils Account for the benefit of
the area councils in the Federal Capital Territory.
Section 5. Limits of power to
deduct or reallocate any amount standing to the credit of the State Local
Government Joint Account, etc.
(1)
It shall be unlawful for any organ, authority or official of a
state or the Federal Capital Territory, however described or constituted,
to alter, deduct or re-allocate funds standing to the credit of the State
Joint Local Government Account or the Federal Capital Territory Joint
Area Councils Account: Provided always that nothing in subsection (1) of
this section shall prevent the House of Assembly of a State or the
National Assembly from prescribing by law the terms and manner for the
distributing money standing to the credit of any of the Joint Accounts,
as the case may be, to the local government councils in the State or the
area councils in the Federal Capital Territory.
(2) Any person who acts in contravention of the
provisions of subsection (1) above, commits an offence and shall be
liable on conviction to a fine twice the amount altered, deducted or
reallocated illegally or imprisonment for a term of five years or to both
such fine and imprisonment.
Section 6. Short Title
This Act may be cited as the Revenue Allocation to
Local Governments and Area Councils (Federation Account, Etc.) Act 2004.
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