- On July 11, 2024, the supreme court of Nigeria delivered a judgment, ruling that all the 774 local government areas will be financially autonomous
- Six months after the judgment the Federal Government is yet to allocate funds directly to local government accounts
- NULGE, SERAP kick, ask FG to implement the Supreme judgment
On July 11, 2024, the supreme court of Nigeria delivered a judgement, ruling that all the 774 local government areas across the federation shall henceforth be financially autonomous.
The apex court, in a landmark judgement, ruled that it is unconstitutional for governors to hold onto funds meant for local governments.
The Supreme Court, in a unanimous decision by a seven-member panel of justices, barred governors of the 36 states of the federation from receiving, withholding, tampering or utilizing funds that stand to the credit of the local government areas.
The ruling, however, generated mixed reactions.
WITHIN NIGERIA gathered that while President Bola Tinubu, former Vice President Atiku Abubakar, the National Union of Local Government Employees, NULGE, Socio-Economic Rights and Accountability Project, SERAP, Labour Party, LP, and Coalition of United Political Parties, CUPP hailed the Supreme Court judgement, former governor of Delta State, Chief James Ibori, said the verdict has dealt a severe setback to the principle of federalism in the country.
Recall that the Federal Government had in a suit marked SC/CV/343/2024, filed on May 24, 2024, prayed to the Supreme Court to give full autonomy to local governments.
It also urged the court to issue an order prohibiting state governors from embarking on unilateral, arbitrary and unlawful dissolution of democratically elected local government leaders.
Besides, the Federal Government prayed to the Supreme Court for an order, stopping governors from further constituting caretaker committees to run the affairs of local governments, against the constitutionally recognised and guaranteed democratic system.
It equally 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 local governments when no democratically elected local government system is put in place in the states.
It argued that Nigeria, as a federation, is a creation of the 1999 Constitution, as amended, with the President, as Head of the Federal Executive Arm, swearing on oath to uphold and give effects to provisions of the Constitution.
The details of the Supreme Court ruling giving 774 local councils financial autonomy includes;
“The Supreme Court ruled on Thursday that all federal funds for local government councils should be paid directly into their accounts.
“Justice Emmanuel Agim, who led a seven-member panel of justices, delivered the judgment in a suit filed by the federal government against the 36 state governors.
“According to the judgment, henceforth, no more payments of local government area allocations will be made to state government accounts. The court also prohibited the governors from receiving, tampering with, or withholding funds meant for local governments.
“Furthermore, the court barred the governors from dissolving democratically elected officials for local governments and deemed such actions a breach of the 1999 Constitution.
“The federal government had approached the Supreme Court with a suit seeking to compel the governors of the 36 federating states to grant full autonomy to local governments in their domains. The suit, marked SC/CV/343/2024, was filed by the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), on behalf of the Federal Government.
“The Federal Government accused the state governors of gross misconduct and abuse of power in its suit, which was based on 27 grounds. In the originating summons, the FG prayed the Supreme Court to make an order stating that funds standing to the credit of local governments from the Federation Account should be paid directly to the local governments rather than through the state governments.
“The justice minister also requested an order restraining governors, their agents, and privies from receiving, spending, or tampering with funds released from the Federation Account for the benefit of local governments when no democratically elected local government system is in place in the states.
“Finally, the Federal Government sought an order stopping governors from constituting caretaker committees to run the affairs of local governments, contrary to the constitutionally recognized and guaranteed democratic system.”
However, nearly six months after the Supreme Court ruled that local governments’ monthly allocations be paid into the individual accounts of the 774 local government councils; the Federation Accounts Allocation Committee (FAAC) is still paying the funds to joint states/LG accounts.
WITHIN NIGERIA local government councils’ allocations for November 2024 were paid into the states/Local Governments Joint accounts by the Federation Accounts Allocation Committee (FAAC) contrary to what Nigerians were made to believe that the funds would go directly into the local governments’ individual accounts as ordered more than five months ago by the Supreme Court.
Findings showed that the sum of N1.727 trillion was shared by the federal, states and local government councils as revenue for the month of November 2024 by the Federation Accounts Allocation Committee (FAAC) – the highest in the history of the country.
By and large, an analysis of communiqués released after the monthly meeting of Federation Accounts Allocation Committee by our reporter showed that from July to December 2024, the total distributable revenue amounted to N8.351 trillion, which was shared among the federal government, states, and local government councils.
Further analysis showed that the total amount allocated to the local government councils was N2.075tn.
The said amount, despite being allocated to the 774 local government areas in the country, are still being held and managed by their respective states.
How governors plan to thwart the judgment
Since the judgement was passed by the apex court some state governors have resorted to both covert and overt action to thwart the full implementation of the judgment.
In Anambra state for instance, the governor, Prof. Charles Soludo on October 15, 2024 passed into law, Local Government Law after the bill was read three times in the state House of Assembly Chambers.
The Anambra state local government law
The bill, submitted to the Anambra State House of Assembly on aThursday, was signed into law despite stiff opposition by some state lawmakers.
The law compels local governments in the state to remit a portion of their federal allocations into a consolidated account controlled by the state government.
Observers said the law was at variance with the Supreme Court ruling which affirmed the financial autonomy of the country’s local governments.
WITHIN NIGERIA gathered that Mr Soludo, after signing the bill into law, stressed that local governments are not usually considered as federal units.
The governor said that although the Supreme Court ruling affirming local government autonomy was intended for transparency, granting absolute autonomy to the local governments would breed chaos.
According to Prof. Soludo, “absolute autonomy would mean that each LG would have its own primary education policy, employ its own teachers, and pay them whatever it can afford and whenever it can do so, etc.
“This would be a recipe for humongous chaos, not only for the administration of local government and pensions but more so in the primary education and primary health sectors,” he said.
He argued that the new local government law in Anambra was not at variance with the Supreme Court ruling.
Soludo explained that Section 7 of the Nigerian Constitution empowers the State legislatures to make laws for the management of local government finances.
“The new law by Anambra House of Assembly is therefore consequential to give operational life to the Supreme Court judgment and not to undermine it,” he argued.
The governor suggested that the new law was intended to prevent local government chairpersons from mismanaging their finances.
“The law seeks to create a framework to ensure that the basic functions mandated by the (Nigerian) Constitution for the local governments are discharged as a matter of first-line charge or the irreducible minimum.
“With these laws, workers and retirees from the local government system in Anambra, such as primary school teachers, primary health workers, workers in the local government system under the local government service commission, can sleep with their two eyes closed,” he said.
Continuing in his justification for the new bill, the governor posited that “No tier of government can function without the collaboration of others. The three tiers have the objective of the people.
“The federal government is not completely autonomous of the state. It is a collaborative arrangement to achieve the same objective,” he said.
ALGON kicks
The Secretary-General of the Association of Local Governments of Nigeria (ALGON), Mohammed Abubakar, while speaking on the delay in the direct payment of federal allocation to local governments, lamented the non-implementation of the Supreme Court ruling.
He said, “Sincerely, we are all in the dark as we stand now. People who don’t want this local government autonomy to work are having a field day.
“Ordinarily, the Supreme Court judgment should not be left unattended. We are in the dark, to the extent that we cannot pinpoint what the government is trying to achieve by not enforcing the Supreme Court judgment allowing allocation to be paid directly to local government accounts.
“We had made our submissions that the local government accounts should be opened across board and submitted to the Office of The Accountant-General for the allocation to be disbursed directly, but the governors are claiming that they already utilised funds for the interest of the local governments. They also argued that the local governments’ money is not enough to take care of all the health and the primary school teachers. But we are saying they should allow the implementation first, and then we can make a case for whatever deficiencies we have.”
He said further that, “But in a situation where you don’t act but worry about some issues raised by the governors which include that they have incurred a lot of loans on behalf of the local government, then we may not have a way forward.
“So, these are the bottlenecks that we understand are causing these delays, but again, there can be a way out of these issues and we have proffered some solutions to the committee. It is best known to the committee why it has not carried out the advice we gave to them.”
Similarly, a former local government chairman of Igbo-Eze North in Enugu state, Tony Ugwu, said “if Nigeria is talking about local government autonomy without the councils getting allocations directly from the federal government,” the essence of the much-talked about autonomy would have been defeated.
He said, “Many local government chairmen in Nigeria are new in the seat, and have not received any allocation from the federal government. Until that is done, one will be able to know if they are going to match their words with action.
“As far as I am concerned, talking about LG autonomy without the councils receiving allocations directly from the federal government will negate that good intention.
“If the new found autonomy for local governments is religiously implemented, the positive multiplier effect will be much. The important impact it will have is to ensure development of the rural communities which hitherto had suffered serious neglect.”
NULGE reacts to the delay, calls on President Tinubu
Reacting to the delay, the National President of the National Union of Local Government Employee, NULGE Mr. Hakeem Ambali said the delay is not necessary.
In an interview with newsmen recently, on Thursday, NULGE Ambali, decried the delay and called on President Bola Tinubu to urgently enforce the directive.
“We are surprised that up till now, this has not been implemented. However, we received encouraging news during the Yuletide that it would take effect in January. It is disheartening that after six months, we are still discussing this issue.
The court judgment left no room for delays in implementation, and we believe this should have started since October. That is why we are urging Mr. President to act now,” Ambali said.
He highlighted assurances from the President and recent developments indicating that direct allocations to LGAs would commence by the end of January.
“I also recall that the Chairman of the Nigerian Governors’ Forum paid a visit to Mr. President during the Yuletide, and the President reiterated his commitment to implementing this directive. Our expectation is that by the end of January, local governments will have their funds credited directly. We do not want the practice of routing local government funds through intermediaries anymore—enough is enough. The court’s judgment is final and must be respected.”
Ambali also criticised the actions of certain governors, including Prof. Charles Soludo of Anambra State and Dr Alex Otti of Abia State, who allegedly passed laws that conflicted with the Supreme Court’s ruling.
“Governors like Soludo and Otti rushed to pass laws that conflicted with the Supreme Court’s judgment. Such laws are null and void because they cannot override the court’s decision. The Attorney General has already clarified that their actions are illegal and cannot stand in the face of the law,” he stated.
To safeguard the integrity of the allocation process, Ambali explained that a technical committee had submitted key recommendations, including increased transparency and oversight mechanisms.
“The technical committee has submitted recommendations to the presidency to safeguard the process. For example, we have proposed that the Federation Account Allocation Committee publish local government allocations in national newspapers monthly.
“We also recommended the establishment of a monitoring committee to track disbursements. Furthermore, the Minister of Special Duties should organise capacity-building conferences for councilors tasked with oversight functions. Let us not forget that the Nigerian Financial Intelligence Unit is now operational at the local government level.
“Once local governments receive direct allocations, we will see a significant difference. It’s one thing for someone to take your money and give you a fraction; it’s another for you to control your own funds. With direct allocations, local governments will finally be in charge of their finances.”
Ambali warned governors against attempts to derail local government autonomy, emphasising that LGA officials would also be held accountable for any lapses.
“The apprehensive actions by Governors Soludo and Otti will not succeed. Unlike governors, local government chairmen and officials do not enjoy immunity. Anyone who violates the law will face the full wrath of the law,” he added.
Confusion in the local government system
Also, some top officials in some local government councils in Enugu state, who spoke under anonymity told WITHIN NIGERIA that while they were looking forward to the new dispensation, there were still no sufficient and clear indications that their financial autonomy would be without encumbrances from the governors.
One of them said, “It remains to be seen if the newly found financial autonomy by local governments in the country would be allowed by the state governments to thrive.
“The body language of the governors in response to the new arrangement is eloquent and audible enough. It is not only in this state, but all over the country. But as things stand now, no one can categorically state how the whole arrangement will pan out. We are only waiting to see how things will unfold.”
Another anonymous official told our reporter that “Elected Council chairmen are under severe pressure to perform. They are yet to begin work because no kobo has been released directly to the council’s treasury.
“They were hoping that the November allocations from the federation account would be given directly to the local governments, but their hope was dashed.”
He also disclosed that all eyes were “now on the elected chairmen and members of the legislative councils to deliver,” adding that if they got the money he was certain that they would do well.
“Honestly, we are under enormous pressure from the people to deliver and the people also know how much that comes to the councils from the federation account every month because it is usually published on the national dailies. Now, the people from my local government already know that the council receives approximately N300 million every month and sometimes slightly higher.
“From September to this November the council would have received close to a billion naira and the people know that. But as it is now we have not resumed work because there is no fund yet. Initially, we had hoped that the governor would have given us the November allocations, but it was not so. As I speak nothing is happening right now because the funds are not available. Hopefully, if we get this December allocations directly then work will start, “he said further.
Citizens, civil servants react to the delay
A cross-section of citizens, who spoke with this reporter, said it would be nice for local government chairmen to receive their allocations directly.
A primary school who gave her name as Georgina said that “this is the time for the newly elected Council chairmen to account for why they were elected.
“Let them prove to us why they were elected; they have a lot on their shoulders, let them provide good governance in the rural areas. They should strictly detach themselves from the state government and usher in true local autonomy,” he said.
According to Mrs. Georgina “ if the state governors should allow these elected local government chairmen to operate, perhaps all these unpaid local government gratuities and pensions would be liquidated in no distant time.
Mrs. Stella Afolabi, an Ibadan-based fashion designer, urged governors to allow local government chairmen to be truly independent. She wants the Council chairmen to look at the rural roads in her community and address the menace of herdsmen infiltrating into their farms.
“It’s a welcome development, but we don’t want a situation where the chairmen are controlled by the governor, they should truly be independent and provide good roads in the rural areas, our farmers need protection too, they should address the problem of herdsmen destroying our crops in our villages,” she said.
A civil servant, Nanjul Marcus, from Edo state, said, “It is sad that the federal government itself has not started implementation of the direct remittance of allocations to local government councils.
“I heard local council chairmen in other states complaining of financial strangulation by their governors. The story is not different in Edo state.
It would be a welcome development for local councils to receive FAAC allocations directly.”