New Challenge for LG Autonomy as Soludo Proposes Funds Deduction Bill

• Concerns are rising in Anambra State over a new bill that could undermine local government autonomy recently upheld by the Supreme Court
• Governor Soludo’s bill requires local governments to remit federal allocations into a state-controlled account, raising fears of financial independence erosion

Concerns are rising in Anambra State over the potential threat to local government autonomy, recently upheld by the Supreme Court, following a new bill introduced by Governor Charles Soludo.

The bill requires local government areas (LGAs) to remit a portion of their federal allocations into a state-controlled consolidated account.

Hon. Henry Mbachu, representing Awka South I State Constituency (Labour Party), sounded the alarm on Tuesday, urging the governor to withdraw the bill submitted to the Anambra State House of Assembly.

Mbachu argued that the bill could undermine LGAs’ financial independence by allowing the state government to share funds meant for local councils.

In response, Governor Soludo defended the bill, stating it does not violate the Supreme Court’s ruling on local government autonomy. He challenged critics to seek legal redress if they believe otherwise.

The bill, titled Anambra Local Government Administration Law 2024, was passed by the House of Assembly on Tuesday. Section 13(1) of the bill establishes a “State Joint Local Government Account,” where all federal allocations to LGAs must be deposited. Section 14(3) requires LGAs to remit a state-determined percentage of their federal funds to the consolidated account within two working days of receiving them.

If the state receives the funds on behalf of the LGAs, Section 14(4) allows for automatic deductions before the remaining funds are disbursed.

Mbachu expressed concern that these deductions would weaken LGAs’ ability to manage their funds independently. He urged President Bola Ahmed Tinubu to closely monitor governors who might undermine local government elections by diverting funds for elected chairpersons.

The lawmaker also cited the Supreme Court’s recent judgment granting financial autonomy to LGAs as a key step forward, warning that the bill could reverse that progress and obstruct local government elections.

Members of the Labour Party caucus in the Anambra State House of Assembly, including Hon. Jude Umennajiego, Hon. Patrick Okafor, and Hon. Nkechi Ogbuefi, have distanced themselves from the bill, affirming their support for local government autonomy and the Supreme Court ruling.

In defense of the bill, Anambra State Commissioner for Information, Dr. Law Mefor, argued that the State House of Assembly acted within the law. He questioned whether the Supreme Court had the authority to “make laws” and stated that the court’s judgment merely interprets the constitution, not overrides it.

Mefor referred to Section 7 of the 1999 Constitution, which empowers State Houses of Assembly to legislate on the administration and financial matters of LGAs. He asserted that the bill complies with the constitution and urged those opposed to it to challenge it in court.

Political analysts have noted that if Governor Soludo succeeds in implementing the bill, other state governors may follow suit, appearing to respect the Supreme Court ruling while retaining control over local government funds.