Eight months after the Supreme Court affirmed the financial autonomy of Nigeria’s 774 local government areas (LGAs), implementation has yet to commence as bureaucratic hurdles continue to delay direct allocation disbursement.
In line with the July 11, 2024 verdict, the Accountant-General of the Federation (AGF), Oluwatoyin Madein, and the Attorney-General and Minister of Justice, Lateef Fagbemi, SAN, have begun consultations on the modalities for submitting LGAs’ bank accounts for direct payment. However, identifying LGAs with democratically elected officials has posed a significant challenge.
According to minutes from the Federation Account Allocation Committee (FAAC) Technical Sub-Committee meeting, obtained by reporters on Sunday, only Delta State LGAs have fully submitted their account details to the Office of the Accountant-General of the Federation (OAGF). The submissions were confirmed during a FAAC Technical Sub-Committee meeting held on January 17, 2025, at the Federal Ministry of Finance Headquarters in Abuja.
Despite progress in collecting account details, discussions on the modalities of submission are still ongoing. The Accountant-General highlighted that some LGAs provided their details directly, while others did so through their respective state governments. The complexity of verifying which councils have duly elected leadership remains a major impediment.
“The office has started receiving account details from various sources, some directly, while others were routed through state governments. So far, only local governments in Delta State have provided complete account details,” Madein stated.
The FAAC minutes further disclosed concerns over the legal procedures surrounding account submission, particularly regarding constitutional provisions. Niger State’s Accountant-General suggested that once the Attorney-General provides a legal framework, the OAGF should issue a formal directive outlining the steps for LGAs to follow in submitting their accounts.
CBN Verification Process Sparks Controversy
Meanwhile, the Central Bank of Nigeria (CBN) has commenced profiling local government chairmen and account signatories to ensure financial accountability. CBN’s Director of Legal Services, Kofo Salam-Alada, emphasized that Know Your Customer (KYC) procedures must be fulfilled before activating LGA accounts. However, the Association of Local Governments of Nigeria (ALGON) has refuted claims that the CBN has contacted local councils for verification.
“We have not been invited for signatory verification,” said Chinesu Ekeke, ALGON Chairman in Abia State. “I am just hearing this for the first time. No official communication has been sent to us.”
A similar stance was echoed by ALGON executives in Oyo, Benue, Ogun, Kano, and Ekiti states, with many local government chairmen stating they had received no directives from either the Federal Government or the apex bank regarding account submissions.
An ALGON official in Ibadan accused the CBN of politicizing the issue, stating, “The CBN has not invited any local government chairman in this state for verification. If the bank had communicated with the state Ministry of Local Governments, the information would have reached us immediately.”
Governors’ Resistance and Implementation Challenges
The Supreme Court ruling prohibits governors from controlling LGA funds, directing the AGF to remit allocations directly to local governments. However, eight months after the judgment, implementation remains stalled. ALGON has accused some state governors of attempting to undermine the process to retain control over LGA finances.
The National Union of Local Government Employees (NULGE) has warned the CBN against enabling state governors to obstruct financial autonomy. NULGE President, Hakeem Ambali, dismissed claims that LGAs have failed to provide the required audited accounts, asserting that every council has at least three years of audited financial records.
“We are ready to present our audited accounts to ensure a smooth transition. No local government is without audited records,” Ambali said.
Despite legal backing for LGA autonomy, the conflicting positions of the Federal Government, CBN, and state authorities continue to delay implementation. With Delta State leading the way in submitting account details, other states are expected to follow suit once clear directives from the AGF and CBN are issued. Until then, the fate of local government financial autonomy remains uncertain.
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