The Federation Accounts Allocation Committee (FAAC) has disbursed a total of N2.08 trillion to Nigeria’s 774 Local Government Areas (LGAs) between July and December 2024. Despite this significant allocation, the funds have not been paid directly to the LGAs as mandated by a landmark Supreme Court ruling issued in July 2024. Instead, the allocations continue to be routed through state government accounts, sparking frustration among local government officials.
The Supreme Court’s ruling granted full financial autonomy to local governments, directing that funds meant for LGAs should be paid directly into their accounts, bypassing state governments. The intent of the ruling was to promote autonomy and ensure that allocated funds are used appropriately at the grassroots level. However, nearly six months after the judgment, the Federal Government has yet to implement this directive due to what it describes as “practical impediments.”
The Minister of Finance, Wale Edun, explained that a committee had been established to examine the feasibility of implementing the judgment. However, concerns about the impact on salary payments and the operational viability of LGAs have slowed the process.
An analysis of the allocations from July to December 2024 shows a gradual increase in the amounts disbursed to LGAs. In July, LGAs received N337.02 billion, and by December, this amount had risen to N402.55 billion, the largest disbursement of the period. The total amount allocated to LGAs during the six-month period was N2.08 trillion, representing approximately 24.9% of the N8.35 trillion total distributable revenue.
Despite the increase in allocations, local government officials and members of the Association of Local Governments of Nigeria (ALGON) and the Nigeria Union of Local Government Employees (NULGE) are dissatisfied with the continued delay in the implementation of the ruling. ALGON’s Secretary-General, Mohammed Abubakar, voiced concern over the lack of clarity regarding the government’s intentions, emphasizing that local governments are still waiting for their funds to be paid directly into their accounts.
In response to the non-compliance with the Supreme Court’s ruling, the Attorney General of the Federation, Prince Lateef Fagbemi, warned state governors who continue to bypass the judgment, threatening legal action for contempt of court. He also cautioned local government chairmen against mismanaging or embezzling public funds, stating that the autonomy granted to local governments should empower grassroots development, not facilitate corruption.
The delay in implementing the financial autonomy for local governments remains a contentious issue, with continued calls for immediate action to comply with the Supreme Court ruling.
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