The Supreme Court on Thursday granted financial autonomy to Nigeria’s 774 local government councils, ordering the Federal Government to start direct payments to their accounts.
In the lead judgment read by Justice Emmanuel Agim, the Supreme court condemned the state governments’ decades-long refusal to grant financial autonomy to local governments.
Justice Agim emphasized that local government councils should manage their funds independently and that only democratically elected administrations are entitled to these funds, not caretaker committees.
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The court dismissed the preliminary objections raised by the defendants, the state governors.
Justice Agim directed that allocations from the Federation Account should be paid directly to local government councils, bypassing state government coffers. He pointed out that the governors’ retention of these funds has hindered the local government’s activities.
The judgment mandates immediate compliance, stating that no state government should receive funds meant for local governments.
This ruling addresses the long-standing issues of inefficiency within the third tier of government, attributed to the control and mismanagement of funds by some state governors.
The call for local government autonomy has grown in recent months, with President Bola Tinubu also supporting the cause.
In May, the Federal Government, through the Attorney-General of the Federation (AGF), Lateef Fagbemi, sued the 36 state governors over alleged misconduct concerning local government funds.
Currently, the Federal Government receives 52.68% of the country’s monthly revenue, states get 26.72%, and local governments receive 20.60%, as allocated by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and disbursed by the Federation Account Allocation Committee (FAAC).
However, these funds are paid into joint accounts operated by state and local governments.
The AGF’s suit sought an order preventing governors from arbitrarily dissolving democratically elected councils, filed on 27 grounds.
Despite opposition from the state governors, Justice Agim affirmed that the AGF has the right to institute the suit and uphold the constitution.
