The Office of the Accountant General of the Federation (OAGF) has set up a dedicated unit to manage the direct disbursement of funds to Nigeria’s 774 local governments, as the long-awaited financial autonomy for local governments takes effect this month.
The new system, which will ensure that local governments receive their allocations directly from the Federation Account, follows a landmark Supreme Court ruling affirming the independence of local government finances. The first meeting of the Federation Account Allocation Committee (FAAC) for the year, scheduled for Wednesday, is expected to finalize operational details for the direct fund allocations.
Sources at the OAGF confirmed that the necessary structures are in place for a seamless rollout, with most of the 774 local councils set to begin receiving their allocations from January 2025. The rollout will be overseen by an Inter-Ministerial Committee established to implement the Supreme Court’s judgment, which was upheld in July 2024.
“The committee will meet later this month to review the implementation progress and finalize measures before the Accountant-General issues the authorization for full disbursements,” a source at the OAGF explained.
The Finance Minister and Coordinating Minister of the Economy, Wale Edun, had given approval for the direct allocations, with assurances that the system would operate smoothly, as similar processes are already in place for state-level disbursements. The new arrangements are expected to foster grassroots development by strengthening local government autonomy.
The Inter-Ministerial Committee, chaired by the Secretary to the Government of the Federation, Chief George Akume, will also address attempts by some state governors to undermine the autonomy of locally elected officials. This comes as many states have made strides to meet the federal requirements for financial autonomy, including conducting local government elections.
States such as Delta, Adamawa, Plateau, and Ogun have expressed their readiness for the changes, with many councils already managing their financial matters independently. In Delta, for instance, the state government has been providing financial support to local councils since 2015, while Adamawa has long supported local council autonomy.
The federal government’s move to ensure the direct allocation of funds to local governments is seen as a vital step in empowering grassroots governance, addressing corruption, and enhancing the financial independence of local councils. The federal government has also warned that states failing to hold democratically elected councils will be denied their allocations.
The landmark ruling by the Supreme Court deemed it unconstitutional for governors to withhold local government funds, stressing that local governments should receive their share of allocations directly from the Federation Account. The ruling has been hailed as a major step towards reinforcing the autonomy of local government systems in Nigeria.
As the financial autonomy comes into effect, the federal government continues to monitor the situation closely, ensuring that all states comply with the new directives and that the promised benefits of autonomy are realized at the grassroots level.
