THE Federal Government and state governors today, have reached an agreement to impose a three-month moratorium on Local Government (LG) autonomy due to concerns about its impact on salary payments and operational viability.
This development means that Local Governments may not see the implementation of the law regarding direct payments into their accounts until October.
The Supreme Court on July 11, 2024, delivered a landmark ruling affirming the financial autonomy of Nigeria’s 774 Local Governments, stating that governors can no longer control the funds allocated to them.
The Court also instructed the Accountant-General of the Federation to deposit Local Government allocations directly into their accounts, declaring the non-remittance of funds by the 36 states unconstitutional.
During the administration of former President Muhammadu Buhari, the Nigerian Financial Intelligence Unit (NFIU) imposed regulations effective June 1, 2019, prohibiting transactions involving Joint Accounts of State and Local Governments. This regulation mandated that funds be sent directly to Local Government accounts and limited cash withdrawals to a maximum of N500,000 daily, imposing penalties on banks that did not comply.
However, the Nigerian Governors’ Forum opposed this regulation, resulting in the NFIU ultimately backing down.
The situation remained unchanged until May 2024 when Attorney-General of the Federation, Lateef Fagbemi (SAN), filed a suit (SC/CV/343/2024) in the Supreme Court to reinforce the constitutional autonomy of local government areas.
The suit aimed to prevent state governors from arbitrarily dissolving democratically elected local government councils and establishing caretaker committees, actions deemed unconstitutional. The Attorney General argued that the constitution requires a democratically elected local government system and does not permit alternative governance structures.
The suit also requested that funds from the Federation Account be directed to local governments, circumventing the allegedly unlawful joint accounts managed by state governors.
The Federal Government sought an injunction to prevent governors and their representatives from receiving or disbursing local government funds without a legally elected local government structure. They argued that the governors’ failure to establish this system undermines the 1999 Constitution. The Supreme Court heard arguments from both sides on June 13, with state governments opposing the suit.
This ultimately led to the Supreme Court’s ruling on July 11, 2024, reinforcing the financial independence of local governments. In a unanimous decision by a seven-member panel, the Court upheld the Federal Government’s lawsuit aimed at enhancing the autonomy of local governments in Nigeria.
Justice Emmanuel Agim, who delivered the lead judgment, ruled that local governments must receive their allocations directly from the Accountant-General of the Federation, declaring it illegal and unconstitutional for governors to withhold funds meant for local government areas.
Many Nigerians, including local government chairmen, welcomed the ruling as a progressive step toward reforming governance in the country.
Although some governors expressed apprehensions about the ruling, the Nigerian Governors’ Forum, led by Kwara State Governor AbdulRahman AbdulRazaq, acknowledged it as relief from the financial burden faced by the states.
Following a meeting with President Bola Tinubu on July 12, AbdulRazaq stated that governors appreciated the shift in power regarding local government autonomy, noting that the public may not fully understand the financial pressures that states face in supporting local governments.
However, reports revealed that over a month after the ruling, the Supreme Court’s directives had not been implemented.
As of July 2024, total disbursements from the Federation Allocation Account Committee reached N1.354 trillion, with Local Governments
Confirmation of LG Allocations
The Chairperson of the National Union of Local Government Employees in Akwa Ibom State, Anestina Iweh, confirmed yesterday that the July allocations for the 774 Local Government Areas (LGAs) were sent to the state finance commissioners.
In an interview with reporters in Uyo, the capital of Akwa Ibom State, Iweh explained that the allocations were directed to the commissioners because the Federal Government had not yet obtained the account details for the LGAs.
“The Federal Government does not have the account details for the 774 LGAs. They have yet to take any action or follow any procedures to update these account details,” she stated.
“We cannot remain silent while workers go without salaries; funds must be available for salary payments. If they are willing to comply with the Supreme Court ruling, they will obtain the account details of the 774 LGAs and take the necessary actions.”
Meanwhile, Dr. Wali Ahmed, Chairman of the Kwami Local Government Area in Gombe State, defended the decision to disburse the July allocation to the finance commissioners, stating that there is a 90-day period for implementing the judgment. He mentioned that councils had been instructed to update their account details with the Treasury Single Account (TSA).
Regarding the alleged illegality of the disbursement to state accounts, Ahmed noted, “A letter was issued stating that within 90 days, all LG signatories must ensure their accounts are linked to the TSA. So, it’s not over yet.”
In Plateau State, an anonymous LG official confirmed that the Federal Government had provided a three-month period before the implementation of the ruling.
“Remember that after the Supreme Court’s judgment, the Federal Government issued a circular allowing a three-month window before implementation begins. As of now, that period has not yet expired, so there is no reason for concern,” the source said.
“We at the local government level are not complaining about our monthly allocations still going through the state government. We receive our allocations as LGs. I can’t speak for other LGs, but in Plateau, we are receiving our allocations appropriately, and the state government does not interfere with them.”
Yesterday, members of the executive councils from Katsina State had traveled to Abuja, though it was unclear whom they were meeting regarding LG autonomy. An anonymous LG chairman from Katsina confirmed that all chairmen, along with the state ALGON chairman, Bello Kaita, were in Abuja for a meeting.
“We are here in Abuja to advocate for our autonomy because the Supreme Court ruling must be respected. However, even the Federal Government’s allocation has not been disbursed, let alone our legal mandate for a four-year tenure. We are here to address these issues.”
Attempts to reach ALGON chairman Kaita were unsuccessful as his phone was not connecting at the time of this report.
Ruling Viewed as Delayed
In a different perspective, Adamawa State Finance Commissioner Augustina Wandamihya referred to the Supreme Court ruling as “belated,” stating that LG autonomy had already been implemented in the state.
Yesterday, Wandamihya noted that Governor Ahmadu Fintiri had granted local government autonomy during his first term in office, promoting transparency and accountability.
“Since Governor Fintiri assumed leadership, he has granted autonomy to the 21 local governments in the state. All local governments now receive their Federal Government allocations directly, without passing through the state account,” she said.
“If this interview were in my office, I could show you all the documents. Thus, in Adamawa State, the Supreme Court ruling is indeed belated.”
Alhaji Idris Yahaya, Secretary of ALGON and Chairman of Song Local Government Area, also confirmed that the July allocation was deposited directly into his council’s account.
“Our governor, due to his commitment to transparency and grassroots welfare, granted local government autonomy long before we took office,” he stated.
Yahaya emphasized that this autonomy has led to significant development at the grassroots level, thanks to the financial independence of councils in the state. He urged other governors across the country to follow Fintiri’s example and grant local governments autonomy to facilitate rapid development at the grassroots.
