The Supreme Court, on Thursday, declared that it is unconstitutional for state governors to hold onto funds meant for Local Government (LG) administrations.
In its lead judgment read by Justice Emmanuel Agim, the apex court observed that the state government’s refusal of financial autonomy for local governments has gone on for over two decades.
Justice Agim stated that local governments have not been receiving the money meant for them, as state governors have been acting in their stead.
He emphasized that the 774 local government councils in the country should manage their funds themselves.
The court dismissed the preliminary objections of the defendants (state governors).
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There are 774 local government areas in the country, but the efficiency of this third tier of government has been hampered by some controlling and overbearing governors who have been accused of mismanaging funds meant for the administration of local governments.
In recent months, calls for local government autonomy have increased in Nigeria, with President Bola Tinubu also supporting the calls.
In May, the Federal Government, through the Attorney General of the Federation (AGF), Lateef Fagbemi, sued the 36 state governors over alleged misconduct of local government funds.
Currently, the Federal Government receives 52.68%, states get 26.72%, and LGs get 20.60% of the country’s monthly revenue allocated by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), which operates under the Presidency and disburses funds through the Federation Account Allocation Committee (FAAC).
Interestingly, LG funds are paid into a joint account operated by state governments and local governments in their domains.
In the suit filed by the AGF, the Federal Government sought an order preventing the governors from arbitrarily dissolving democratically elected councils.
The suit by the AGF was based on 27 grounds. The 36 state governors, who are defendants in the suit, opposed the AGF for instituting the case.
In his judgment, Justice Agim stated that the AGF has the right to institute the suit and protect the constitution.
The apex court consequently directed that Local Government allocations from the Federation Account should be paid directly to them henceforth, and not to state government coffers.
Justice Agim pointed out that the state governors’ retention of the monies meant for the Local Governments truncates the latter’s activities.
He ordered immediate compliance with the judgment, stating that no state government should be paid monies meant for Local Governments.
