Supreme Court declares financial autonomy for Local Government Areas in landmark judgement

The Supreme Court, on Thursday, declared that it is unconstitutional for state governors to hold onto funds meant for Local Government (LG) administrations.

In its lead judgement read by Justice Emmanuel Agim, the apex court observed that the state governments’ refusal of financial autonomy for local governments has gone on for over two decades.

Justice Agim said local governments have since stopped receiving the money meant for them from the state governors who act in their stead.

He noted that the 774 local government councils in the country should manage their funds themselves.

He dismissed the preliminary objections of the defendants (state governors).

There are 774 local government areas in the country but the efficiency of the third tier of government has been hampered by the weight of some controlling and overbearing governors who have been accused of mismanaging funds meant for the administration of local governments.

In the last few months, calls for local government autonomy have increased in Nigeria. President Bola Tinubu also supported the calls. In May, the Federal Government, through the Attorney-General of the Federation (AGF), Lateef Fagbemi, sued the 36 state governors over alleged misconduct of local government funds.

Currently, the Federal Government gets 52.68%, and states get 26.72%. In comparison, LGs get 20.60% of the country’s monthly revenue allocated by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) which operates under the Presidency, and disbursed by the Federation Account Allocation Committee (FAAC).

Interestingly, LG funds are paid into a joint account operated by state governments and local governments in their domains.

In the suit filed by AGF, the Federal Government sought an order preventing the governors from arbitrarily dissolving democratically elected councils. The suit by the AGF was on 27 grounds.

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The 36 state governors, who are defendants in the suit, opposed the AGF for instituting the case.

In his judgement, Justice Agim said the AGF has the right to institute the suit and protect the constitution.

The apex court consequently directed that Local Government allocations from the Federation Account should be paid directly to them henceforth, and not to state government coffers.

Justice Agim pointed out that the state governors’ retention of the monies meant for the Local Governments truncates the latter’s activities.

Justice Agim ordered the immediate compliance of the judgement, stating that no state government should be paid monies meant for Local Governments.