On July 11, 2024, Nigeria's Supreme Court delivered a landmark ruling granting complete financial autonomy to the 774 local government areas (LGAs) of Nigeria. The ruling was a stepping stone to grassroots democracy, ensuring that local government councils receive direct federal allocations and not money that goes through the state governments.
The enforcement of the ruling, however, has been drastically undermined, particularly:
- LGAs' failure to provide banking details for direct allocation.
- Elected LGAs cannot be distinguished since some are run by caretaker committees rather than elected representatives.
These challenges have delayed the introduction of financial autonomy for local government and stirred debates between the Office of the Accountant General of the Federation (OAGF) and the Attorney General of the Federation (AGF) regarding the best action.
Supreme Court's Landmark Judgment on Local Government Autonomy
The Supreme Court ruling was a milestone victory for Nigeria's local government system, upholding the constitutional independence of LGAs.
The ruling put an end to state control of LGA finances, with the consequence that federal fund allocations directly find their way into LGA treasuries. The move was aimed at:
- Putting an end to misappropriation and diversion of LGA funds by state governments.
- Deepen grassroots governance through enabling the LGAs to control their own budget and development projects.
- Firm up Nigeria's democratic foundation through increasing the accountability of local governments.
To learn more about the Supreme Court decision, check out Premium Times.
Implementation Roadblocks: Failing to Turn in Banking Details
Despite the unambiguous Supreme Court directive, most LGAs have failed to forward their account information to the OAGF for direct federal allocation payments.
As of January 2025, only the 25 LGAs of Delta State have complied with the directive.
The tardiness has created a logjam in the allocation process, prompting the federal government to issue a final directive for all LGAs to forward their banking information forthwith.
For further on this issue, refer to The Nation.
Federal Government's Directive: Open CBN Accounts for Direct Payment
In an effort to speed up the disbursement process, the federal government has instructed all 774 local government councils to open official accounts with the Central Bank of Nigeria (CBN).
The Association of Local Governments of Nigeria (ALGON) pointed out that this step:
- Promotes transparency and avoids mismanagement of funds.
- Facilitates the payment of federal allocations directly to LGAs.
- Does away with state governments' interference.
For the complete government directive, go to Daily Nigerian.
CBN's Requirement: Two-Year Audited Accounts Submission
Another greatest challenge is the directive by the Central Bank of Nigeria that every LGA must submit audited accounts of two years before they receive direct federal allocation.
The directive is meant to ensure accountability, but several LGAs have failed to do this, adding more delays in disbursing funds.
To read the latest on the directive by the CBN, click on The Beagle News.
Identifying Democratically Elected Local Government Councils
It is only democratically elected local government councils that are eligible for direct federal allocations, as stated by the Supreme Court judgment.
The challenge is that most states are currently operating caretaker committees instead of elected councils, which brings about questions of eligibility.
In an effort to counteract this, the Attorney General of the Federation is working on guidelines that will result in only legitimate LGAs being funded.
For further details, see Nairametrics.
State Governments' Reactions to the Supreme Court Judgment
The judgment has elicited mixed reactions from state governors:
- Governors support local government autonomy, explaining that it strengthens democracy.
- Others oppose the ruling, and argue that some LGAs lack financial management capacity.
To view a detailed breakdown of state responses, go to Vanguard.
Anti-Corruption Agencies to Monitor LGA Funds
In preventing funds abuse, the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) will monitor all local government spending.
Any misappropriation or diversion of LGA funds will invoke investigations and prosecutions of the involved officials.
For further information on this oversight program, visit News Bulletin.
Capacity Building and Institutional Strengthening for LGAs
To Equip LGAs appropriately to properly manage their financial autonomy, the government is launching capacity-building schemes, which are:
- Training the officials of the local governments in management of finances and budgeting.
- Strict enforcement of financial reporting frameworks.
The programs will support LGAs to keep finances managed efficiently and with transparency.
For more details, visit Daily Trust.
Public Accountability and Citizen Participation
The judgment will increase public accountability because LGAs will be answerable directly for implementing development projects.
With more citizens participating in decision-making, the ruling could reshape Nigeria's grassroots governance.
To evaluate its impact on governance, see Tribune Online.
Conclusion
The Supreme Court ruling on local government autonomy is a game-changer for Nigeria's governance system. However, issues such as failure to submit banking details, unaudited accounts, and identification of legitimate LGAs must be addressed.
With clear guidelines, government oversight, and anti-corruption measures, the ruling can possibly enforce stronger grassroots democracy and improved local governance in Nigeria.