LG Autonomy: CBN, 774 LG Chairmen in Dispute Over Account Requirements

The Central Bank of Nigeria (CBN) has begun profiling the chairmen and signatories to the bank accounts of the 774 local government areas (LGAs) across the country. This initiative is part of broader efforts to enforce local government autonomy and enhance financial accountability at the grassroots level. Kofo Salam-Alada, the CBN’s Director of Legal Services, explained that the profiling aims to streamline fund management for local governments and prevent the misappropriation of public funds.

However, the Association of Local Governments of Nigeria (ALGON) has expressed surprise at the development, stating that it has not received any official communication from the CBN regarding the opening of new bank accounts or the profiling process. Salam-Alada made these remarks during a state-of-the-nation discourse on strengthening local government autonomy in Nigeria, organized by the Nigerian Bar Association in Abuja on Wednesday.

The move comes in the wake of a landmark judgment by the Supreme Court on July 11, 2024, which affirmed the financial autonomy of Nigeria’s 774 local government areas. The court ruled that state governors could no longer control funds allocated to local governments and directed the Accountant-General of the Federation to pay local government allocations directly into their accounts. The Supreme Court also declared the non-remittance of funds by the 36 states unconstitutional, marking a significant step toward ensuring financial independence for local governments.

The CBN’s profiling initiative is seen as a critical measure to implement the Supreme Court’s ruling and ensure that funds meant for local governments are used transparently and effectively. By identifying and verifying the chairmen and signatories to LGA accounts, the CBN aims to curb corruption and mismanagement, which have long plagued local government administration in Nigeria.

The development has sparked mixed reactions, with some stakeholders applauding the move as a necessary step toward empowering local governments, while others, like ALGON, have raised concerns about the lack of prior consultation. As the CBN proceeds with the profiling process, the focus will remain on ensuring that the autonomy granted by the Supreme Court translates into tangible improvements in governance and service delivery at the local level.