Next month marks a pivotal moment in Nigeria’s governance structure as local governments (LGAs) across the country are set to receive direct allocations from the Federation Account, a move designed to ensure their financial independence and empower grassroots development.
This decision follows the July 11 Supreme Court judgment granting financial autonomy to councils, ending decades of dependence on state governments. Implementation of this ruling has been gradual, but a source within the Inter-Ministerial Committee tasked with enforcing the judgment confirmed that the full rollout will commence in January 2025.
The state/local government joint account has been a contentious issue, with many governors resisting its dissolution. Efforts by some states to sidestep the judgment have drawn criticism. For instance, the Anambra State House of Assembly passed a bill requiring LGAs to remit portions of their allocations to a state-controlled account, a move defended by Governor Chukwuma Soludo as necessary for transparency. Critics argue it undermines the spirit of financial autonomy.
Conversely, Nasarawa State has fully aligned with the judgment, abolishing joint accounts and restructuring its local government system. Governor Abdullahi Sule’s support for grassroots financial independence underscores the potential for reform.
The Federal Government, led by President Bola Ahmed Tinubu, has backed financial independence for LGAs. Attorney-General of the Federation Lateef Fagbemi (SAN) has warned governors against non-compliance, threatening contempt proceedings. He reiterated that financial autonomy is designed to empower the grassroots, cautioning against misuse of funds by council chairmen.
The Inter-Ministerial Committee, chaired by Secretary to the Government of the Federation George Akume, includes key government figures such as Coordinating Minister of the Economy Wale Edun and Minister of Budget and Economic Planning Abubakar Bagudu. The committee aims to ensure a smooth transition to the new financial arrangement.
The Association of Local Governments of Nigeria (ALGON) has laid out a template for judicious use of funds. Immediate past National President Aminu Muazu Maifata urged council chairmen to focus on tackling challenges such as insecurity, water shortages, and infrastructure gaps. He emphasized the importance of capacity building and governance reforms.
“This is an opportunity for LGAs to redefine governance at the grassroots level,” Maifata said. “Chairmen must channel resources towards impactful programmes and projects that improve lives.”
The Senate has called for constitutional amendments to eliminate ambiguities in Section 162(6) of the 1999 Constitution, which created joint accounts. Senate President Godswill Akpabio highlighted the importance of a clear framework to enforce financial autonomy effectively.
With all 774 councils now governed by democratically elected officials as mandated by the Supreme Court, the stage is set for a new era of local governance. The direct allocation of funds is expected to enhance the capacity of LGAs to fulfill their constitutional responsibilities without undue interference.
As the implementation begins, all eyes will be on council chairmen to see how they utilize these funds to transform their communities and deliver tangible results.
