Witness details N1.8bn local government fund diversion in Nigeria
A Nigerian court heard testimony detailing the systematic diversion of N1.8 billion in local government funds to private accounts, highlighting persistent governance risks for investors in sub-national African markets.
An Abuja High Court has heard how N1.8 billion belonging to local government councils in Taraba State was routed through a private company account. The testimony came during the trial of former state governor Darius Ishaku and former permanent secretary Bello Yero, who face charges of criminal breach of trust and conspiracy over an alleged N27 billion fraud. Both defendants have pleaded not guilty.
Taiwo Jones, an assistant cashier at the state's local government bureau, told the court he received 69 separate transfers from the Gassol Local Government Area into his company's account. Jones stated the transactions were directed by Yero and the bureau's director of finance. “I inform them when the money hits my account, and they give me further directives to send it to Prince in Abuja or withdraw some,” the witness said.
The funds were subsequently withdrawn in cash and handed over to co-witnesses, including Yero and a driver. Jones testified that bulk cash was physically moved to the state Government House. “I know this because I sometimes drive the Permanent Secretary to the Government House with the money inside Ghana-must-go bags,” he told Justice Sylvanus Oriji.
Sub-national fund diversions of this scale underscore the structural governance weaknesses that complicate fiscal oversight in Nigeria. For institutional investors, bondholders, and foreign direct investors assessing state-level risk, the alleged conversion of N27 billion is a stark reminder of the operational hazards on the ground. It demonstrates how statutory allocations meant for local infrastructure and public sector wages can be systematically bypassed through informal, opaque cash networks.
Prosecutors highlighted a specific N100 million transfer to P3 Cornerstone’s account on December 24, 2018. The official payment narration listed the purchase of assorted grains for holiday celebrations. “The money was not spent on buying assorted grains. Instead, I withdrew the money and handed it over to Lawal,” Jones said. The witness also disclosed receiving N30 million from a Donga Local Government salary account.
The Economic and Financial Crimes Commission is leading the prosecution. Justice Oriji adjourned the case until Tuesday.
