A civil society organization, Initiative for Grassroot Advancement In Nigeria (INGRA) says Kogi state government lacks the power to unilaterally freeze accounts of local government councils.
In a statement issued by its Executive Director, Hamza Aliyu, in Lokoja on Friday, INGRA insisted that local government councils are a different tier of government.
Recall that on Thursday, Kogi State Government, through a circular signed by the Commissioner of Finance, Budget and Planning, Asiru Idris, ordered financial institutions to freeze all state government run accounts.
The circular further went on to also order for the freezing of all local government accounts, including cancellation of all standing orders and instructions.
Reacting to the circular through the statement, INGRA noted that the “order on the face of it does not seem to be out of place considering the fact that a new government will be sworn in on the 27th January 2024. It would seem a proactive move to prevent any unforeseen tampering with government funds before the new administration takes over. A rather protective and preemptive move.
“However, the question to be asked is does the State Government have the powers to FREEZE accounts belong to other tiers of government or other arms of government? And what does this FREEZING mean for the Kogi Workers, Kogi State House of Assembly and the Judiciary? Will their salaries be affected?
“There are different government agencies empowered by law to freeze bank accounts, such as the Central Bank of Nigeria, Economic and Financial Crimes Commission (EFCC) and other anti-graft agencies, however due legal process must be followed for the act to be lawfully done.”
Referring to a judgement delivered by a Court of Appeal in the recent case of Polaris Bank Ltd V. Yayamu Global Services Ltd & Anor (2022), INGRA explained that the appellate court held that it is settled and sacrosanct that for a bank to freeze, place a caution or any form of restraints on its customer’s account, there must be a court order.
“Doing otherwise will amount to the bank taking the laws into its own hands. See the case of GTB v. Registered Trustees of Network of People Living with HIV AIDS in Nigeria (NEPWHAN) (2021)
“The bank is estopped from feigning ignorance or claiming that it had no duty to confirm if the directive to freeze an account is made pursuant to a courts order.
“In Guaranty Trust Bank PLC v. Odeyemi Oluyinka Joshua (2021), the Court of Appeal held that the bank must ensure that there is an order of Court before it proceeds to freeze the account of any person,” the statement added.
INGRA said the State can give an order freezing its own accounts, as is within its rights, however, freezing the accounts of the local governments which under Section 7 of the Nigeria Constitution as amended, is clearly not within the powers of the state government.
The civil society organization called on the Kogi State House of Assembly to immediately look into this order with a view to assessing its worthiness and constitutionality so as not to put the state into a constitutional crisis.
