LG  financial autonomy: One year after S’Court ruling, Tinubu handicapped on enforcement

Nigerians are worried that one year after the Supreme Court’s landmark ruling that extended financial autonomy to local governments, the current administration has disappointingly failed to enforce the judgment, as state governors continue to maintain their stranglehold over the councils’ coffers.

As the third tier of government closest to the people, local governments are mandated with the onerous responsibilities of ensuring the well-being of the people at the grassroots through provisions of primary education, primary health centres, marketplaces, inner roads, parks, sanitation, among other basic services.

But since 1999, state governments, for selfish reasons,  have usurped these roles, making it extremely difficult for local councils to meet their basic obligations to the people, especially at the grassroots.

There had been decades of extensive civil society advocacy to ensure justice for local governments, and Nigerians of all hues were elated when the apex court on July 11, 2024, ruled on a suit filed by the federal government through the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), against the 36 state governments.

The lawsuit sought full autonomy for the 774 local governments in Nigeria, whose efficiencies to deliver dividends of democracy to the grassroots have been negatively impacted by overbearing influence of sub-national governments.

The defining judgment prohibited state governments from collecting and withholding councils’ allocations from the federation account, and ordered that the Accountant General of the Federation pay them directly to the councils.

“…since payment through states has not worked, the justice of this matter demands that LG allocations from the federation account should henceforth be paid directly to the LGs,” the court held, demanding “an immediate compliance with this judgement,” the ruling affirmed.

Politics over Law

In August 2024, a 10-man inter-ministerial committee chaired by the Secretary to the Government of the Federation, George Akume, was constituted  to  give effect to the ruling. Other members of the committee were: Minister of Finance & Coordinating Minister of the Economy; Attorney General of the Federation; Minister of Budget & Economic Planning; Accountant General of the Federation; Governor, Central Bank of Nigeria, Permanent Secretary, Federal Ministry of Finance; Chairman, Revenue Mobilization Allocation & Fiscal Commission; Representative of State Governors and Representative of Local Governments

Investigations by Business Hallmark showed that one year after the important rulings, bureaucracies and political manoeuvring have disrupted the implementation of the ruling.

The enforcement encountered a setback in August when the federal and state governments came to a compromise agreement on a three-month moratorium over concerns raised bordering on salary payments of council workers, the imperative of conducting local government elections in some states, among others. There is also the unforeseeable issue of constitutional amendment of some provisions, such the creation of the joint State/ Local Government Account.

It hit  another dead alley  in February 2025 as the CBN gave a directive to  local governments to provide, at least, two years of audited financial reports as a prerequisite to receive their allocations directly, insisting they must meet this requirement before they can open accounts for direct remittance of their allocations.

Public Discontent

In the meantime,  the Association of Local Governments of Nigeria (ALGON), the National Union of Local Government Employees (NULGE), lawyers and civil society organisations have railed  against what they interpreted as delay tactics, imploring the federal government to enforce the judgment without delay.

In March this year, ALGON took  the Attorney General of the Federation (AGF), the Federal Republic of Nigeria and 23 others to a Federal High court in Abuja,  seeking the implementation of the Supreme Court judgment and inclusion of local governments in the Federation Account Allocation Committee (FAAC).

The association maintained that the AGF, Ministry of Finance, states’ Commissioners of Finance and CBN had taken “precipitate action to frustrate the implementation of the [Supreme Court’s] decision.”

“After the judgment, we approached the AGF’s office, requesting that local governments be allowed to open accounts with commercial banks of their choice. But the AGF instead directed the CBN to open accounts on their behalf. That defeats the idea of autonomy,” ALGON Secretary General, Muhammed Abubakar, said.

LGs took receipt of  N3.408trn through states in 11 months.

Business Hallmark analysis revealed that 11 months after the Supreme Court ruling that gave local government autonomy, over N3.408 trillion accrued to the 774 councils from the federation account and was paid to the state and local governments’ joint account.

In July  2024, FAAC distributed N431.079 billion to the federal government, N473.477 bn to the state governments, and N343.703bn to local governments. The total amount consisted of distributable revenue from various sources, including statutory revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), Exchange Difference, and Solid Mineral revenue.

Of the N1.203 trillion distributable revenue in August 2024, the federal government took receipt of  N374.93bn; state governments got N422.86bn, while councils were paid  N306.53bn. In September 2024, councils received  N306.53bn through state governments, which got N422.86bn of their own, while the federal government received N374.92bn.

The following month, FAAC shared N1.411 trillion between the federal government, N433.021bn; state governments, N490.696bn, and local governments, N355.621bn while N132.404bn (13% of mineral revenue) was shared among the benefiting states as derivation revenue.

In November 2024, the federal government received N581.856bn; state governments got N549.792bn, while local governments received N402.553bn indirectly. In the succeeding month, councils received N361.754bn through state governments, which got N498.498bn of their own, while the federal government received N451.193bn.

In January 2025, state governments got N590.614bn; local governments received N434.567bn, while the federal government collected N552.591bn. In February, local governments received N410.559bn through the joint account; state governments collected N562.195 while the federal government got N569.656bn.

Lawyers,NULGE, CSOs berate FG, govs

The National President of NULGE, Aliyu Haruna Kankara, raised the concerning alarm   that relevant government agencies saddled with the responsibility of   enforcing the judgment have continued to pay lip service to it. He wondered why the CBN came up with the condition of two-year audited financial reports, noting  that the apex bank had not issued any circular or guidelines to local governments on the opening of accounts.

“We expect them to issue a circular or guidelines for local governments to come forward and open accounts, but up to this moment, there is no such thing. The Office of the Accountant General of the Federation or the CBN is supposed to issue this circular. I don’t know what the CBN has got to do with the two-year audited accounts of local governments. I don’t know of any local government that has opened an account with the CBN yet.

A lawyer and Deputy Director, Socio-Economic Rights and Accountability Project (SERAP), Kolawole Oluwadare, noted that the delay  emanates from politicking that has  characterized  several government actions. He said the Supreme Court ruling was very clear and the only reason it had not been enforced was because the federal government felt “it is not politically expedient to do so.”

Barrister Malachy Ugwumadu, a human rights lawyer and former president, Committee for the Defence of Human Rights (CDHR), said the beauty of the judgment had been compromised “in the womb of Nigerian politics,” blaming the delayed implementation on the push-back from the political class, especially state governors, and a lack of political will on the part of the federal government.

The Executive Director, Centre for Anti-Corruption and Open Leadership (CACOL), Debo Adeniran, accused state governors of frustrating the implementation of the court ruling.

He also pointed out that bureaucracy had always been the bane of socio-political development in Nigeria and appealed to the federal government to follow through with the actualisation of local government autonomy without further delay.

Barrister Leke Ojo, SAN, told Business Hallmark that “What the Tinubu administration did was to give impression of populist action without good intent. It was pure politics. The delay is a political compromise between the federal government and state governors. ”

Another lawyer, Abdul Rahman Abubakar told this medium that “If the federal government under President Bola Tinubu actually desires financial autonomy for local governments it would have given effect to it immediately after the judgment. It was a ruse to deceive Nigerians, the federal government agenda is to continually use it as a bargaining chip with governors.

Governors deny collusion

The Director General of the Nigeria Governors’ Forum (NGF), Dr. Lateef Shittu, exonerated  state governors from any complicity,  saying the matter lies with  the SGF-led committee for an update on the implementation process.

Also, in a recent interview with Channels TV,  Katsina State governor, Dikko Umar Rada, said he had no problem with restoring autonomy to local governments, but added that there must be checks and balances.