- FG drags 36 states to supreme court, demanding financial autonomy of 774 local governments in the country
- Supreme Court gives judgment in favour of FG, directs that Federal Allocation should be paid directly respective LG accounts
- NGF reacts, says it is welcome development even as Gov. Makinde calls it distraction
On Thursday, July 11, 2024, the Supreme Court declared on that it is unconstitutional for state governors to hold funds allocated for local government administrations.
The seven-man panel, in the judgment delivered by Justice Emmanuel Agim, declared that the 774 local government councils in the country should manage their funds, independently and themselves.
However, the apex court held that the power of the government is portioned into three arms of government, the federal, the state and the local government.
Nevertheless, the court declared that a state government has no power to appoint a caretaker committee and a local government council is only recognisable with a democratically elected government.
The court held that “a democratically elected local government is sacrosanct and non-negotiable.”
The judgment held that the use of a caretaker committee amounts to the state government taking control of the local government and is in violation of the 1999 Constitution.
Furthermore, the court ruled that state governments are perpetuating a dangerous trend by refusing to allow democratically elected local government councils to function, instead appointing their loyalists who can only be removed by them.
The court stated that it is the local government that should receive and manage funds meant for local government.
Giving the judgment, Justice Agim declared, “I hold that the state’s retention of the local government funds is unconstitutional.
“Demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay LG allocations to the LGs directly or pay them through the states.
“In this case, since paying them through states has not worked, justice of this case demands that LG allocations from the federation account should henceforth be paid directly to the LGs.”
The judgment held that the local government council funds must be paid to only democratically elected local government councils stating that “anything other than this will be taken as a gross misconduct.”
According the apex court, this is “a declaration that the state government has no power or control to keep the local government council money or funds.
“A declaration that the local government council is entitled to the local government allocation.
“An order of injunction restraining the defendants by themselves, agents or privies from spending local government allocation.
“A declaration that no state government should be paid any money meant for the local government.
“An immediate compliance to this judgment.”
Consequently, Justice Agim dismissed the objections filed by state governors.
Recall that in May, 2024, the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), instituted a suit on behalf of the Federal Government, before the Supreme Court, against the 36 state governors, seeking full autonomy for local governments.
WITHIN NIGERIA gathered that in a suit marked SC/CV/343/2024, the AGF urged the apex court to issue an order, prohibiting state governors from unilateral, arbitrary and unlawful dissolution of democratically elected LG leaders.
Our findings showed that the suit which is predicted on 27 grounds, contended that Nigeria as a federation, is a creation of the 1999 Constitution with the President, as the head of the Federal Executive arm of the Federation, and has sworn to uphold and give effects to the provisions of the Constitution.
In the suit which accused the state governors of gross misconduct and abuse of power, the AGF sued them through their respective state Attorney-Generals.
Fagbemi prayed that the Supreme Court for an order to allow the credits of LGs to be directly paid to them from the Federation Account in line with the provisions of the Constitution as against the alleged unlawful joint accounts created by governors.
The minister also applied for an order of injunction restraining the governors, their agents and privies from receiving, spending or tampering with funds released from the Federation Account for the benefit of LGs.
The FG further sought an order stopping governors from constituting caretaker committees to run the affairs of LGs as against the constitutionally-recognised and guaranteed democratic system.
In a 13-paragragh affidavit in support of the originating summons deposed to by one Kelechi Ohaeri from the Federal Ministry of Justice, averred that the AGF instituted the suit against the governors under the original jurisdiction of the Supreme Court on behalf of the FG.
The summon partly read, “That the governors represent the component states of the Federation with Executive Governors who have also sworn to uphold the Constitution and to at all times, give effects to the constitution and that the constitution, being the supreme law, has binding force all over the federation of Nigeria.
“That the constitution of Nigeria recognises federal, states and local governments as three tiers of government and that the three recognised tiers of government draw funds for their operation and functioning from the Federation Account created by the Constitution.
“That by the provisions of the constitution, there must be a democratically elected local government system and that the constitution has not made provisions for any other systems of governance at the local government level other than the democratically elected local government system.”
It further read thus; “in the face of the clear provisions of the constitution, the governors have failed and refused to put in place a democratically elected local government system even where no state of emergency has been declared to warrant the suspension of democratic institutions in the state,” adding that the “failure of the governors to put democratically elected local government system in place is a deliberate subversion of the 1999 Constitution which they and the President have sworn to uphold.
“That all efforts to make the governors comply with the dictates of the 1999 Constitution in terms of putting in place, a democratically elected local government system, has not yielded any result and that to continue to disburse funds from the Federation Account to governors for non existing democratically elected local government is to undermine the sanctity of the 1999 Constitution.
“That in the face of the violations of the 1999 Constitution, the federal government is not obligated under section 162 of the Constitution to pay any State, funds standing to the credit of local governments where no democratically elected local government is in place.”
The AGF, on this ground, asked the apex court to invoke Sections 1, 4, 5, 7 and 14 of the Constitution to declare that the state governors and State Houses of Assembly are under obligation to ensure a democratic system at the third tier of government in Nigeria and to also invoke the same sections to hold that the governors cannot lawfully dissolve democratically elected local government councils.
The case was later fixed for hearing on Thursday, May 30, 2024.
In any case, since the supreme court judgment on Thursday, there has been plethora of reactions. While many hail Supreme court for the judgment, others call it a charade and judicial rascality and muscling.
Reactions trail the judgment
However, shortly after the judgment, on Friday, the Chairman of the Nigeria Governors’ Forum, NGF, and Governor of Kwara, AbdulRazaq AbdulRahman, said that the state governors are happy with the Supreme Court judgment that granted fiscal autonomy to local government areas.
Speaking to newsmen before a meeting with President Bola Tinubu at the Presidential Villa, Abuja, Governor Abdulrahman said the judgment has relieved the governors of a burden, noting that they are happy with the devolution of powers to the third tier of government.
“We welcome the ruling of the Supreme Court, compliance is a given and our Attorney Generals have applied for the enrollment order, which we’ll study carefully.
“But by and large governors are happy with the devolution of power in respect to local government autonomy. It relieves the burden on governors.
“Our people really don’t know how much states expense in bailing out local governments, and that’s the issue there.”
The Kwara governor maintained that the NGF has requested for the enrollment of the judgment and will be reviewing it next Wednesday to decide the way forward.
“The forum will meet next Wednesday, to look at the issue wholly and then come up with a resolution on that.”
“Like I said, we haven’t seen the enrollment of the court order and so we really don’t know what is in there,” he stated.
As for Kwara State in particular, AbdulRahman said the judgment will not negatively affect it as the state government has not been tampering with council funds.
“It’s not going to affect the state we’ve never tampered with local government funds. So it’s going to continue.
“What the local governments have to do is to manage themselves, especially with the oncoming minimum wage, to manage their affairs and make sure salaries are paid, traditional rulers get their 5% and those are the main issues,” he said.
Oyo governor says it is a distraction
In what seemed like a contrary view on the judgment, the Oyo state governor Seyi Makinde described the judgment granting financial autonomy to local governments as a mere distraction.
He, however questioned the sustainability of local governments receiving allocations from the federal government.
Addressing members of the Nigerian Union of Journalists, NUJ, in Ibadan, Oyo State, the governor said local governments are not generating much revenues.
Explaining further, Makinde said: “They said there is a judgment of the Supreme Court on local government autonomy.
“I think it is just a distraction. We must face the real issue that we have.
“The issue that we have is that we are not producing enough.
“We are not productive. Maybe it may be part of the problem, we want to have value for what is being shared but our problem is productivity.
“How much are those LGAs generating within their domains?
“Can they survive without handouts from Abuja? Handouts from Abuja, is that the way to go? Is it sustainable?”
We are comfortable with the judgment, says Delta state governor
In the other hand, the Delta State Governor, Sheriff Oborevwori on Saturday threw his full weight behind local government financial autonomy as ruled by the Supreme Court on Thursday.
Oborevwori further said the N14 billion fund accruing to the 25 local councils in the state for the past three months is intact and in the custody of the government waiting for the incoming elected council chairmen to take over.
Speaking with journalists shortly after casting his vote during the local government election at his Osubi community Ward polling centre of Okpe LGA in the state Oborevwori reaffirmed his belief in local government autonomy in the country.
In his words, “On the issue of the Supreme Court judgment, it does not affect Delta State because in Delta State we don’t tamper with Local Government money.
“As we speak, the money for the past three months is still there. Almost N14 billion is still there waiting for the Chairmen to take over.
“So, we don’t touch government money, we augment. So whether the Supreme Court said they should have autonomy, I believe in financial autonomy.
“As a former Speaker, we were at the forefront of the issue of financial autonomy for the Legislature and for the Judiciary.
“The judgment does not affect Delta State, so we still believe in it.”
Speaking further, he said,“ Then on the issue of the same court judgment, the Supreme Court has given judgment but you can see that we believe in that same process. That is why when I came in.”
“I did not constitute a transition Committee. I am not in support of the transition Committee the HPMs are the ones handling the place and they were given three months to enable us to do the election today.
“By early next week, those who won will be sworn in by the grace of God.”.
Ex-governor Ibori says it is an assault on true federalism
Reacting to the judgment in a post on his X page, Ibori described the ruling as an assault and a setback on true federalism, adding that the decision contravenes section 162(3) of the 1999 Constitution.
He said the federal government “has no right to interfere with the administration of LGAs under any guise whatsoever”.
The former Delta governor said the ruling would have “far-reaching” implications, such as “erosion of state autonomy” and centralising “more power to the centre,” among others.
“The supreme court has dealt a severe setback on the principle of federalism as defined by section 162(3) of the 1999 Constitution (as amended),” Ibori wrote.
“The section expressly provides thus: ‘Any amount standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the Local Government Councils in each State on such terms and in such manner as may be prescribed by the National Assembly’.
“Sections 6 provide further clarity on the subject matter: ‘Each State shall maintain a special account to be called ‘State Joint Local Government Account’ into which shall be paid all allocations to the Local Government Councils of the State from the Federation Account and from the Government of the State.
“The implications of the ruling are far-reaching, and the issues that readily come to mind are Constitutional Interpretation: The Supreme Court’s ruling appears to contradict the explicit provisions of Section 162 of the 1999 Constitution.
“This raises questions about judicial interpretation and whether the court has overstepped its bounds in reinterpreting clear constitutional language.
“Balance of Power: The ruling potentially shifts the balance of power between the federal government and states. By allowing federal intervention in local government finances, it arguably centralises more power at the federal level, contrary to the principles of federalism.
“State Autonomy: This decision could be seen as an erosion of state autonomy. States are meant to have significant control over their internal affairs, including the administration of local governments, in a federal system.
“Financial Independence: The ruling may impact the financial independence of states and local governments. If the federal government can directly intervene in local government finances, it could potentially use this as a tool for political leverage.
“Precedent-setting: This decision could set a precedent for further federal interventions in areas traditionally reserved for state governance, potentially leading to a more centralised system of government over time. That local governments must be ‘democratically elected’ goes without saying.”
The former governor added that he hopes the ruling “will be reviewed at the earliest time possible because it clearly stands the concept of federalism on its head”.