The Federation Accounts Allocation Committee (FAAC) disbursed ₦2.08 trillion to local government councils (LGCs) between July and December 2024. However, despite a Supreme Court ruling in July granting financial autonomy to Nigeria’s 774 LGCs, these funds continue to be routed through state governments, sparking backlash from the Association of Local Governments of Nigeria (ALGON) and the National Union of Local Government Employees (NULGE).
The landmark Supreme Court ruling directed that local government allocations be deposited directly into their accounts, bypassing state governments to promote financial independence and effective fund utilization. Nearly six months later, the Federal Government has yet to implement this directive, citing “practical impediments.”
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that a committee had been established to explore the practicability of enforcing the judgment, noting concerns over salary payments and operational viability.
From July to December 2024, FAAC distributed a total revenue of ₦8.35 trillion among the federal, state, and local governments. Local councils received ₦2.08 trillion, approximately 24.9% of the total. Monthly allocations to local governments fluctuated during this period, with the December disbursement of ₦402.55 billion marking a six-month high, reflecting a 13.2% increase over November’s allocation.
Compared to the same period in 2023, local government allocations increased by 72.06%, equivalent to an additional ₦869 billion. Despite these substantial disbursements, the funds remain under state government control.
In its July judgment, the Supreme Court declared the withholding of local government funds by state governors unconstitutional. It ruled that local governments must receive and manage their funds independently, warning that any deviation constitutes gross misconduct.
The court also condemned the appointment of caretaker committees to oversee local governments, emphasizing that councils must be democratically elected. It decried state governments’ interference as a violation of the 1999 Constitution.
Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN), has issued a stern warning to state governors defying the ruling, threatening to pursue contempt charges. He also cautioned local government chairmen against mismanaging funds, stressing that autonomy is intended to empower grassroots development, not facilitate corruption.
ALGON Secretary-General, Mohammed Abubakar, criticized the delay in implementing the Supreme Court’s directive. “We are all in the dark. People opposing LG autonomy are taking advantage of the situation. The Supreme Court judgment should not be ignored,” Abubakar lamented.
He revealed that ALGON and NULGE had submitted proposals for opening local government accounts to facilitate direct payments but have yet to see any progress.
The continued withholding of local government allocations by state governments raises questions about the enforcement of the Supreme Court’s decision and the Federal Government’s commitment to grassroots empowerment. Stakeholders demand urgent action to ensure local councils gain the financial autonomy guaranteed by law.
