Local Councils to Begin Receiving Direct Allocations from Federation Account Next Month

Starting next month, local councils across Nigeria will receive direct allocations from the federation account, enhancing financial autonomy and grassroots development.

Unless there are any last-minute changes, local government councils in Nigeria are scheduled to begin receiving direct allocations from the Federation Account starting next month.

This comes after December’s allocation was distributed to all levels of government, a source disclosed over the weekend.

This move represents an important step towards executing the Supreme Court’s July 11 decision, which provided financial autonomy to local councils.

This decision seeks to put an end to the longstanding practice of routing council allocations through the state/local government joint account, a system frequently criticized for its delays and inefficiencies.

Efforts to implement the ruling have encountered opposition from several state governors displeased with the Supreme Court’s decision. Nevertheless, a member of the Inter-Ministerial Committee responsible for enforcing the judgment has confirmed that approval has been given to put the direct allocation system into operation.

Some councils have reportedly begun receiving their allocations directly, but the process will be fully implemented next month.

The source refused to identify which councils have already moved to the direct disbursement system.

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According to the source, a few local government areas have already begun receiving their direct allocations, but all 774 LGAs will fully commence receiving their allocations starting in January 2025.

The committee will meet again in January to assess progress and finalize measures before the Accountant-General of the Federation authorizes the full rollout.

Nigeria is currently at a pivotal point in its governance structure.

Our January 2025 meeting will also focus on addressing the actions of governors trying to undermine the independence of democratically elected LGA chairpersons, deputies, and councillors, ensuring they are not pressured into serving state interests.

This action is considered a crucial measure in enabling councils to fulfill their constitutional duties effectively, free from excessive interference by governors.

The source conveyed disappointment over the Edo State House of Assembly’s two-month suspension of democratically elected local government chairmen and their deputies. This action followed a petition by Governor Monday Okpebholo, who accused them of insubordination for failing to submit their financial statements as instructed.

Dissolving elected local government authorities by governors is a significant breach of democratic principles.

The source stated, “These actions erode the independence given to local governments and foster a situation where local government areas become tools for state executives.”

The committee, led by George Akume, the Secretary to the Government of the Federation (SGF), includes several key members: Wale Edun, Coordinating Minister of the Economy; Lateef Fagbemi (SAN), Attorney-General of the Federation and Minister of Justice; Abubakar Bagudu, Minister for Budget and Economic Planning; Oluwatoyin Madein, Accountant General of the Federation; Olayemi Cardoso, Governor of Nigeria’s Central Bank (CBN); Muhammed Shehu from Revenue Mobilisation Allocation and Fiscal Commission as Chairman. Additionally there are representatives from both state governors and local governments.

President Bola Ahmed Tinubu supported the financial independence of councils.

The inter-ministerial committee approved the execution of constitutional measures that acknowledge councils as the third level of government.

Fagbemi had warned that he would start contempt proceedings against governors who defied the July 11 Supreme Court ruling.

Supporting the financial independence of councils, Fagbemi stated: “The autonomy of local governments is intended to empower communities at the grassroots level, not to benefit individuals personally.”

Any chairman proven to have diverted funds will face serious legal repercussions.

Associated News

Certain states have enacted laws that appear to be designed to circumvent the Supreme Court’s decision.

For example, the Anambra State House of Assembly enacted a Local Government Administration Bill requiring local government areas to deposit part of their allocations into a state-controlled joint account.

Governor Chukwuma Soludo justified the legislation as essential for ensuring transparency and fostering collaboration. However, critics, such as civil society groups, accused his administration of disregarding both the intent and specifics of the Supreme Court’s ruling on financial autonomy for councils.

Conversely, the Nasarawa State House of Assembly complied with the Supreme Court ruling by eliminating joint accounts and reorganizing its local government system to ensure adherence.

By signing the bill, Governor Abdullahi Sule demonstrated his support for grassroots financial independence.

Following the Supreme Court judgment that requires councils to be managed by democratically elected officials before they can access direct allocations from the Federation Account, all states have held elections resulting in elected chairmen and councillors.

The Senate also expressed its opinion, calling for full adherence to the Supreme Court ruling.

It recommended constitutional amendments to clarify Section 162(6) of the 1999 Constitution, responsible for establishing state and local government joint accounts.

Senate President Godswill Akpabio highlighted the importance of establishing a clear framework to effectively implement local government autonomy.

Aminu Muazu Maifata, the recent past National President of the Association of Local Governments of Nigeria (ALGON), yesterday offered advice to council chairmen regarding the use of direct allocations allocated to them.

“I genuinely anticipate that they will strive to enhance the lives of people at the grassroots level.”

Maifata expressed anticipation that they will direct those resources towards executing commendable programs and projects, while also addressing challenges at the grassroots level.

He explained that ALGON has already developed a guide for council chairmen on the prudent use of their FAAC allocations.

Maifata, a former chairman of Lafia LGA in Nasarawa State, also urged the chairmen to address issues related to insecurity, water shortages, and infrastructure deficiencies.

He stated that these are the fundamental needs of those living in rural areas.

The former ALGON boss stated, “I don’t anticipate any chairman facing challenges in fulfilling their constitutional duties.”

I can confidently assure you that I genuinely anticipate their efforts to enhance the lives of people at the grassroots level.

“We established the template when the Supreme Court delivered its judgment, and each chairman is aware of their responsibilities if resources are available. Therefore, I expect them to adhere to our framework and provide effective governance to our community at the grassroots level.”

I also anticipate that they will be involved in strengthening the capabilities of both the legislative and executive branches of various local governments throughout the country.

I anticipate that they will bring in expert speakers who can address topics aimed at enhancing the local government administration.

These are some of the main areas I anticipate they will begin addressing right away.