LG Autonomy: FG To Commence Direct Payment Of Monthly Allocation To Councils From January

LG Autonomy: FG To Commence Direct Payment Of Monthly Allocation To Councils From January

“This is a critical juncture in Nigeria’s governance structure”

Barring any last-minute changes, local government councils will start receiving direct allocations from the Federation Account next month (January). This will begin with the disbursement of this month’s allocation to the various tiers of government, according to a source per The Nation newspaper.

The direct allocations from the Federation Account Allocation Committee (FAAC) will help to implement the July 11 judgment by the Supreme Court that granted financial autonomy to councils. Since the judgment, the federal government has worked to minimize disruptions to state and local government operations.

However, the transition away from the joint account into which council allocations are usually paid has faced challenges due to resistance from some governors, many of whom are dissatisfied with the Supreme Court’s ruling.

A member of the Inter-Ministerial Committee set up to enforce this ruling confirmed that approval has been granted for the direct FAAC allocations to local government areas (LGAs) starting next month, after finalizing various pending issues.

While some councils have already started receiving direct allocations, the process will be fully operational for all 774 LGAs by January 2025. The committee plans to reconvene in January to assess progress and finalize measures before the Accountant-General of the Federation issues authorization for the complete rollout.

“This is a critical juncture in Nigeria’s governance structure,” the committee member stated. “Our January 2025 meeting will also address actions taken by governors that undermine the autonomy of democratically elected chairpersons, deputies, and councillors, ensuring they are not pressured into serving state interests.”

This initiative is seen as a vital step in enabling councils to fulfill their constitutional responsibilities without undue interference from governors.

The source voiced disappointment over the recent suspension for two months of elected local government chairpersons and deputies by the Edo State House of Assembly, following a petition from Governor Monday Okpebholo who accused them of insubordination for failing to submit their financial statements as required.

“It is highly undemocratic for governors to dissolve elected local governments. Such actions undermine the autonomy granted to local governments and create an environment where LGAs become pawns of state executives,” the source emphasized.

The committee, chaired by Secretary to the Government of the Federation George Akume, includes members such as the Coordinating Minister of the Economy, Wale Edun, Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), Minister of Budget and Economic Planning, Abubakar Bagudu, Accountant-General of the Federation, Oluwatoyin Madein, Central Bank of Nigeria Governor, Olayemi Cardoso, and Revenue Mobilisation Allocation and Fiscal Commission Chairman, Muhammed Shehu, along with representatives from state governors and local governments.

President Bola Ahmed Tinubu has expressed his support for the financial independence of councils. The inter-ministerial committee has endorsed the implementation of constitutional provisions that recognize councils as the third tier of government.

Fagbemi has warned that he would initiate contempt proceedings against defiant governors who fail to comply with the July 11 Supreme Court judgment. He stated, “Local government autonomy is meant to empower the grassroots, not enrich individuals. Any chairman found guilty of diverting funds will face severe legal consequences.”

Some states have introduced laws that appear to circumvent the Supreme Court’s judgment. For example, the Anambra State House of Assembly passed a Local Government Administration Bill requiring LGAs to remit a portion of their allocations into a state-controlled joint account. Governor Chukwuma Soludo defended this law as necessary for transparency and collaboration. However, critics, including civil society groups, have accused his administration of undermining the spirit of the Supreme Court judgment regarding financial autonomy for councils.

Conversely, the Nasarawa State House of Assembly has complied with the Supreme Court ruling by abolishing joint accounts and restructuring its local government system to ensure adherence. Governor Abdullahi Sule signed the bill, signaling support for grassroots financial independence.

As part of the Supreme Court’s judgment—which mandates that councils must be run by democratically elected officials in order to qualify for direct allocations from the Federation Account—elections have been conducted in all states, ushering in elected chairpersons and councillors. The Senate has also urged full compliance with the Supreme Court judgment. Read More

The Nation