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A recent judgment by the Federal High Court in Abuja, which barred the Central Bank of Nigeria from disbursing funds meant for the local governments in Rivers State, sparked debate within Nigeria’s legal and political circles, writes Onozure Dania
Legal experts and public commentators have expressed concern over the recent judgment by the Federal High Court in Abuja, which barred the Central Bank of Nigeria from disbursing funds meant for the local governments in Rivers State, emphasising the potential negative impact on governance and grassroots service delivery.
The judgment, delivered on October 30, 2024, by Justice Joyce Abdulmalik, has been scrutinised for its potential to disrupt governance at the grassroots level and hinder service delivery.
Justice Abdulmalik’s judgment came in response to a case regarding Governor Siminalayi Fubara’s presentation of the 2024 budget to a four-member Rivers State House of Assembly.
She ruled that this was an affront to the constitutional provisions governing budgetary approval, describing Fubara’s subsequent receipt and management of monthly allocations as a violation of the 1999 Constitution.
Justice Abdulmalik held that the CBN, the Accountant-General of the Federation, and financial institutions like Zenith Bank and Access Bank must prevent Fubara’s access to further funds from the Consolidated Revenue and Federation Account.
The judge cited earlier decisions of both the Federal High Court and the Court of Appeal in Abuja, which invalidated the actions of the four-member assembly.
The court also emphasised the constitutional duty of the apex bank to ensure that legislative bodies like the Rivers State Assembly operate within legal bounds before disbursing funds.
However, on the same day, the Rivers State Government appealed the Federal High Court, Abuja’s judgment which retrained the Central Bank of Nigeria from further releasing allocations from the federation account to the state.
Speaking on the judgment, a Senior Advocate of Nigeria, Awa Kalu, expressed his reservations about the court’s judgment, which appears to authorise the CBN to withhold Rivers State’s share of federal allocations.
“I have not had the opportunity to fully analyse the Federal High Court’s judgment which appears to authorise the CBN to seize, confiscate or prevent Rivers State from receiving its portion of an amount standing to its credit from Federal allocations.
However, the Federal Government is not the owner of funds allocated to itself, the states, or local governments. The monthly allocation process is a multi-tier exercise designed to enable each level of government to function,” Kalu said.
Kalu also criticized what he described as an increasing tendency to regard the Federal Government as the sole proprietor of these funds.
“It is becoming quite fashionable to baptise the Federal Government as the owner of such funds. As a matter of constitutional fact, the Federal Government is merely a beneficiary of a statutory percentage of the allocation made monthly, as stipulated by Section 162 of the Constitution.
“‘The Federation shall maintain a special account to be called the ‘Federation Account’ into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”
Kalu further stressed that the courts should not be used as tools to undermine the economic stability of any state.
He said the Supreme Court has made it clear that the Federal Government does not have the vires to seize funds allocated to any state.
“In that regard, I hold the view that the Federal High Court cannot authorise the CBN to seize funds standing to the credit of Rivers State,” he said.
On his part, Kunle Adegoke criticised the decision, noting, “I have not yet seen a copy of the judgment to scrutinise the judge’s reasoning.
However, from what has been transmitted through the press, I do not believe that the court possesses the competence or the authority to direct that payment due to local governments should not be released.”
Adegoke highlighted constitutional provisions that mandate direct allocations to local governments.
“Just as no court can direct that payments meant for the federal government be withheld, it is equally implausible for a court to halt the disbursement of funds meant for local governments.
These allocations are constitutionally mandated, and any interference risks serious consequences. Even if funds are received by the wrong entity, the appropriate response is to clarify the distribution channel.
“This is why the Attorney General of the Federation brought a case to the Supreme Court, seeking clarity on whether funds should pass through the state or be sent directly to local governments.
The Supreme Court has already ruled that payments should go directly to local governments, reinforcing that such funds cannot be withheld by court order,” he said.
Adegoke warned of a prolonged legal battle following the judgment, especially the fact that the grassroots may bear the brunt of the inadequate flow of funds to attend to their affairs.
“Imagine the delay if this matter proceeds to the Court of Appeals and then to the Supreme Court. God forbid that such a delay should occur.
One can only imagine the contracts that will be affected, the local government officials who will face difficulties, and the lives that could be lost due to disruptions in governance. The masses will bear the brunt of this decision.
The best course of action for the state government is to lodge an appeal and push for an expedited hearing to resolve this impasse quickly.
“Discretion should have been exercised considering the impact of such an order on local government administration and the people who depend on those services.
“I do not believe it is right for the court to prevent funds from being released to local governments, irrespective of the underlying reasons,” he added.
Also, human rights lawyer, Inibehe Effiong, expressed skepticism over the court’s decision and the legal foundation on which it stands.
Effiong argued that withholding statutory allocations could lead to severe disruptions in state operations.
“I believe allocation is a conditional entitlement of every state by Sections 81 and 162 of the Constitution. The amount standing to the credit of the state must be paid directly to the state. So, I don’t understand the propriety of this ruling.
“If a state is denied its allocation, the rippling effect can only be imagined. For the period that the allocation is not paid, the civil service will be unable to receive their salaries, and even officials of the state judiciary will not be paid. This means that governance would come to a halt. That is not acceptable.”
Effiong further questioned the legality and implications of the judgment.
“I’m not sure if statutory allocation receipts can be halted in such a manner. I want to believe other legal options could have been explored. Declaring that a state’s allocation should not be paid is a very serious matter. I hope the appellate courts will look into it and take a position. Governance cannot afford to stall because of such an order.”
