Govs plot to subvert Supreme Court on LG autonomy

…as decision compounds state govts’ woes

After losing their bid to maintain the status quo with respect to local government financial autonomy, State governors did a volte-face on Friday following a meeting with President Bola Tinubu, declaring that the Supreme Court judgment granting financial autonomy to LGAs would relieve them of the burden of shouldering their responsibilities.

But for states that are already borrowing to pay salaries, despite a significant increase in allocations over the past few months following the withdrawal of fuel subsidy, the court decision, which essentially removes nearly half of the funds hitherto under their care, will be another setback for them, even if it also takes away the responsibility of overseeing the overhead cost of running the third tier of government.

Speaking to journalists at the State House, Abuja, after meeting with President Tinubu, chairman of the Nigeria Governors’ Forum (NGF) and Governor of Kwara State, AbdulRazaq AbdulRahman, hailed the Supreme Court decision, noting that it had relieved the governors of a burden.

“We welcome the ruling of the Supreme Court, compliance is given and our Attorney Generals have applied for the enrollment order, which we will study carefully,” he said, “But by and large, governors are happy with the devolution of power in respect to local government autonomy. It relieves the burden on governors. Our people really don’t know how much states expend in bailing out local governments, and that’s the issue there.” The governors meet on Wednesday to review the decision.

The apex court, it would be recalled, had on Thursday, directed that the financial allocations meant for running all 774 local government areas in the country be paid to them directly. It declared that state governments have no right to keep and manage allocation on behalf of the local governments, a practice it said is unconstitutional.

Justice Emmanuel Agim, who read the lead judgment, while slamming the governors for abusing the constitution, said states are mandated to ensure that their local government councils are democratically elected, and that governors cannot use their powers to dissolve democratically elected local government councils.

“The amount standing to the credit of local government councils must be paid by the federation to the local government councils and not by any other person or body,” the judge said.

“The said amount must be paid to local government councils that are democratically elected. An order of injunction is hereby granted restraining the defendants from collecting funds belonging to the local government councils when no democratically elected local government councils are in place.

“An order that henceforth no state government should be paid monies standing to the credit of the local government councils.

“An order for immediate enforcement and compliance with these orders by the state governments and successive governments henceforth.”

Background

The federal government had in May filed a suit at the Supreme Court against governors of the 36 states. In the suit marked SC/CV/343/2024, the federal government asked for full autonomy for the country’s 774 local governments.

In the suit filed by Lateef Fagbemi, attorney-general of the federation (AGF) and minister of justice, the federal government also requested the Supreme Court to authorize the direct transfer of funds from the federation account to local governments — in accordance with the constitution. The suit was hinged on 27 grounds.

“That the constitution of Nigeria recognizes federal, state and local governments as three tiers of government and that the three recognized tiers of government draw funds for their operation and functioning from the federation account created by the constitution,” the originating summons had read.

“That all efforts to make the governors comply with the dictates of the 1999 Constitution in terms of putting in place a democratically elected local government system, has not yielded any result and that to continue to disburse funds from the federation account to governors for non-existing democratically elected local governments is to undermine the sanctity of the 1999 constitution.”

The federal government had asked the apex court to invoke sections 1, 4, 5, 7, and 14 of the constitution to declare that the governors and state Houses of Assembly are under obligation to ensure democratically elected systems at the third tier.

The state’s woes compounded

Thursday’s judgment has put to bed the issue of financial autonomy of the local governments, even if governors may still find ways around it. But it comes at a time, when many states are resorting to borrowing to pay salaries, even as organized labour are insisting on a N250,000 minimum wage, from the current N30,000, which a number of states are yet to afford to pay.

As at March 2024, 31 state governments had borrowed N457.17 billion from the Central Bank of Nigeria (CBN) – facilitated through the Salary Bailout Facility (SBF), an intervention by the apex bank initiated in 2015 – to pay salaries to their respective civil servants.

Local government allocations have before now, constituted nearly half of the funds available to state governors, who had, by relying on the ambiguity of the constitution on matters of local government finances, rendered the third tier of government ineffective.

Under the current revenue-sharing formula, the federal government gets 52.68% of revenue, states 26.72%, and local governments 20.60%. But on account Section 6 of the constitution, which says that each state shall maintain a special account to be called ‘ Joint State/Local Government Account’ into which shall be paid all allocations to the Local Government Councils of the State from the Federation Account and the Government of the State, governors have before now maintained hold of local government funds and turned local government executives into mere appointees of the state.

Indeed, quoting this section 6 of the constitution, James Ibori, former governor of Delta State, had sharply disagreed with the apex court, arguing that the judgment had dealt a severe setback to the principle of federalism as defined by section 162(3) of the 1999 Constitution.

The court’s ruling on the matter, he said, is an assault on true federalism.

“Any amount standing to the credit of the Federation Account shall be distributed among the federal and state governments and the local government councils in each state on such terms and in such manner as may be prescribed by the National Assembly,” Ibori said shortly after the judgment was delivered.

“Section 6 provides further clarity on the subject matter: Each State shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the Local Government Councils of the State from the Federation Account and the Government of the State.”

From 2020 to the first half of 2024, the 774 local governments in the country have a princely sum of N9.28trn as federal allocations, but the funds have rarely trickled down to the grassroots, as they were largely hijacked by state executives.

Looking Forward

The Supreme Court judgment has been commended by many, who say it will spur development at the grassroots, local governments being the closest to the people. The national president of the National Union of Local Government Employees (NULGE), Mr. Ambali Olatunji, said the Supreme Court’s ruling on local government autonomy will solve over 50 per cent of Nigeria’s problems.

Olatunji, in an interview with the News Agency of Nigeria (NAN), expressed joy at the ruling, describing the feat as freedom and a new dawn for the country.

Similarly, Prof. Mike Ozekhome, SAN, said the court’s judgement is timely and courageous, as according to him, what the judgement has done is more like interpreting Section 162 of the Constitution, which provides for a joint State-Local Government Account.

“In this case, money is normally paid to state governors’ accounts and then for them to disburse to the local governments for them to share. But what has been happening is that, as I noted in 2020, over three years ago, the state governors have been behaving like bandits, waylaying local governments’ funds along the way and thus impoverishing them, leaving them with nothing to work, just a little for salary, and nothing to actually work for the people whom they represent.

Also reacting to the judgment, Chief Olisa Agbakoba, SAN, former president of the Nigerian Bar Association, described it as a landmark decision that will free the local governments from the undue influences of the governors.

“It’s a landmark decision that frees the constitutionally prescribed local government from the stranglehold of their state governors. One can only hope that the financial autonomy granted to local governments will be used to benefit the communities,” he said.

Former Vice President Atiku Abubakar, and Peter Obi’s Labour Party, among others, have also welcomed the verdict as a win for the people of Nigeria.

But for others, it could also mean opening up another sphere of influence for corrupt political actors to steal government funds.

“The problem has never been who gets the money,” said Kalu Aja, an economic and financial expert. “The question is how the money is spent.”

Indeed, the major clog on the wheel of Nigeria’s development has always been corruption both among political actors, but perhaps even more in the civil service. Thus, for skeptics, financial autonomy to local governments could mean a full replication of the malaise at the grassroots level.

Mr. Aja contends that with the Supreme Court decision, serious questions now have to be asked about roles and responsibilities.

“Who funds primary schools in the future? Who collects property tax? Will LGA get a share of NIPP? Just like States? Why not? Same principle. What about LGA funds in Sovereign Wealth Fund and ECA? Can the Federal “save” on behalf of LGAs. What of VAT? Is it owned by the State or LGA?” he inquired.

“Finally, elections: If states can’t receive LGA funds, why should States conduct elections into LGAs?”

The judgment, which Fagbemi, the AGF says takes immediate effect, means that local governments in 21 states of the federation, including Rivers, Abia, Anambra and many others, currently running local governments with caretaker chairmen, will no longer get allocations until elections are conducted to elect chairmen in those states.

The governors had been in the habit of hiring and firing caretaker chairmen for local governments, which enables them to maintain absolute control. But, while the Supreme Court judgment has put an end to this practice, observers say it only solved half of the problem, because, according to them, elections at the local government level under state controlled electoral commissions are not much different from appointments.

“The Supreme Court decision is not really a victory for now, but it’s a starting point. For now all the local government chairman are selected by the governors,” said Hon. Shaban Shuaibu, BOT chairman, Association of Local Government of Nigeria (ALGON). “What is happening now is that the governors will select candidates give them tickets and they become the chairman. SIEC (State Independent Electoral Commission) should be eliminated and INEC should take over.”

Inibehe Effiong, a human rights lawyer, expressed the same reservations, noting that, “The fact is that we don’t have democratic elections at the local government level. Even when they decide to be conducting elections, the state electoral commissions are basically appendages of governors. They do the bidding of the state governor. So, we don’t have credible elections at that level, even those that are supposedly elected, their names are just written in government houses and given to compromised state electoral commissions to announce”.

AGF Fagbemi had also last month proposed that SIEC should be scrapped. Speaking at a one-day discourse, Fagbemi posited that the powers of SIECs should be transferred to the Independent National Electoral Commission (INEC).

Fagbemi said governors have exploited the flaws in certain sections of the 1999 constitution, effectively rendering local governments powerless and irrelevant.

According to him, these inadequacies have allowed the governors to abuse the rights of local governments by using SIECs to impose leaders on them through sham elections.

“To achieve this, many experts have proposed that there is a need for the scrapping of the state independent electoral commission,” he had said.