Why Financial Autonomy for LGAs Is Still a Dream - FG Reveals Shocking Setbacks

Despite the Supreme Court's ruling on July 11, 2024, which affirmed the financial autonomy of Nigeria's 774 local government areas (LGAs) and barred state governors from controlling council funds, the implementation of the judgment remains stalled. The federal government has now revealed that two major obstacles are preventing the allocation of funds directly to LGAs: the failure of 749 LGAs to submit their account details and the uncertainty over which councils have democratically elected chairmen.

This was disclosed during the Federation Account Allocation Committee (FAAC) Technical Sub-Committee meeting, with Accountant-General of the Federation (AGF), Oluwatoyin Madein, presiding.

According to minutes from the FAAC meeting, only Delta State's 25 local government councils have so far provided their account details, making them the only state eligible for direct financial allocations.

"So far, only local governments in Delta State have provided account details. However, consultation with the Attorney-General of the Federation on the modalities of the submission of the accounts is still ongoing," the report stated.

AGF Madein further explained that beyond the issue of missing account details, there is a more pressing challenge: identifying which LGAs are under elected leadership.

"The challenge lies in determining which local government councils have constitutionally elected chairmen," she said. "Additionally, for those with properly elected leadership, the question remains: What mechanisms will be deployed to ensure they receive direct allocations? This is because numerous complexities need to be addressed."

In an effort to streamline the process, the Central Bank of Nigeria (CBN) has begun profiling LGA chairmen and the signatories to the bank accounts of all 774 councils.

The CBN's Director of Legal Services, Kofo Salam-Alada, explained that the profiling process, which includes a Know Your Customer (KYC) verification, is crucial for ensuring financial accountability.

"This is all about standard procedure in the form of KYC (Know Your Customer). Anyone who will be a signatory to the account must be profiled. The process is ongoing, and we are collaborating with the AGF's office. We have also written to the LGAs," he said.

However, the Association of Local Governments of Nigeria (ALGON) has raised concerns, stating that they have not received any official communication from the CBN regarding the submission of account details or signatory verification.

ALGON Chairman in Abia State and Mayor of Isuikwuato LGA, Chinesu Ekeke, denied receiving any notification from the CBN or the AGF's office.

"No, we have not been invited for signatory verification. I am just hearing this for the first time. I have not seen any publication to that effect. Even at ALGON headquarters, nobody has informed us," Ekeke said.

The National Union of Local Government Employees (NULGE) has accused state governors of trying to sabotage the Supreme Court's ruling by creating administrative bottlenecks that delay the direct funding of LGAs.

NULGE had earlier warned the CBN against aiding state governors in undermining the financial autonomy of local governments, emphasizing that state governments have historically manipulated LGA finances to suit their interests.

The Supreme Court had declared that the non-remittance of funds to local governments by state governors was unconstitutional. It directed the Accountant-General of the Federation to pay local government allocations directly to their accounts.

However, eight months later, the ruling has yet to take full effect, raising concerns that the financial autonomy of LGAs is still being hindered by bureaucratic delays and political interference.

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