In a landmark ruling, the Supreme Court has prohibited the 36 state governors from retaining or utilizing funds meant for the 774 Local Government Areas (LGAs) in Nigeria. The apex court declared that the long-standing practice of governors receiving and seizing LGA funds is illegal and unconstitutional.
The court, led by Justice Emmanuel Agim, ruled that this practice, which has persisted for over two decades, violates Section 162 of the 1999 Constitution. The judgment emphasized that no State House of Assembly has the authority to enact laws that interfere with the finances allocated to LGAs.
The Supreme Court underscored the necessity for LGAs to be governed by democratically elected officials and mandated that funds intended for LGAs must be paid directly to them from the federation account. The ruling stated, “Demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay LGA allocations to the LGAs directly or pay them through the states. In this case, since paying them through states has not worked, justice of this case demands that LGA allocations from the federation account should henceforth be paid directly to the LGAs.”
Additionally, the court declared the appointment of caretaker committees by governors to run LGAs unconstitutional, affirming that the 36 states must ensure democratic governance at the local level.
This judgment followed a suit filed by the Federal Government seeking financial autonomy for the LGAs. The court also dismissed preliminary objections from the state governors challenging the competence of the suit.
This decision marks a significant step towards reinforcing the financial independence and democratic governance of local governments across Nigeria.
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