In a significant move towards local government autonomy in Nigeria, statutory allocations are expected to be paid directly to Local Government Areas (LGAs) starting in November 2024, barring any last-minute resistance from state governors. This policy change follows a Supreme Court ruling affirming LGAs’ financial independence from state governments, according to an exclusive interview with Hakeem Ambali, National President of the National Union of Local Government Employees (NULGE).
The Economic and Financial Crimes Commission (EFCC) has pledged to monitor the spending of these funds by the 774 LG chairmen, enhancing accountability and combating misuse of federal allocations.
This landmark shift comes after a prolonged struggle for LGA autonomy. In May, the Federal Government filed a lawsuit, through Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, challenging state governors’ control over LG allocations. The Supreme Court ruled on July 11, 2024, that LGAs should receive funds directly, and it is unconstitutional for state governors to withhold these funds. The Federal Government then issued a three-month moratorium to address potential impacts on salary payments and operational viability.
An inter-ministerial committee, including Finance Minister Wale Edun, Budget Minister Abubakar Bagudu, and Central Bank Governor Olayemi Cardoso, was established to implement the Supreme Court’s mandate. Headed by Secretary to the Government of the Federation George Akume, the committee finalized its recommendations on October 13.
Despite this progress, many LGAs remain without elected councils, with at least 164 LGAs across eight states yet to hold elections, risking suspension of their federal allocations. As of last week, the Federal Accounts Allocation Committee is scheduled to start direct payments to LG accounts by November.
Ambali confirmed that recent technical sessions with the Ministry of Budget and National Planning have been held to smooth the transition and ensure accountability in the disbursement process. “We want everything in place to avoid any issues,” Ambali stated. He cited Abia as an example of states still vying for control.
Meanwhile, EFCC Chairman Ola Olukoyede underscored the agency’s commitment to overseeing LGA budget performance, stating, “We’ll work closely with stakeholders to track council budgets, ensuring funds are used as intended.” Olukoyede added that additional zonal directorates will enhance EFCC’s monitoring capabilities nationwide.
NULGE President for Edo State, Daudu Clifford, mentioned that state governors initially sought a three-month delay in implementation, which concludes in October. Clifford warned that LGA officials would face accountability risks if they yield to governors’ demands to release funds.
Association of Local Government in Nigeria (ALGON) President Aminu Kaita confirmed the allocation transition is underway, stating, “We’re on track, with an October deadline in place.”
As Nigeria awaits full implementation of LGA autonomy, NULGE and other unions continue to advocate for financial independence at the local level, highlighting the transformative potential of direct fund disbursement for grassroots development.
