LG allocations should be paid directly from Federation Account – Supreme Court
By Emma Ogbuehi
In a decisive move to grant local governments financial autonomy and free them from the yoke of state governors, the Supreme Court, on Thursday, ruled that henceforth, the Federal Government should pay any money standing to the credit of the Local Governments in the Federation directly to the Local Government Areas managed by democratically elected officials.
In a lead judgment by Justice Emmanuel Agim, the apex court also held that it is unconstitutional for State Governments to retain and use allocations meant for the LGAs on their behalf without transferring same to them as provided in Section 162(3) of the Constitution.
The Supreme Court made these pronouncements in its ongoing judgment in the suit filed by the Attorney General of the Federation (AGF) seeking full autonomy for the LGAs.
In the suit, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, sought full autonomy and direct fund allocation to the 774 local governments in the country.
Fagbemi prayed the Supreme 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.
In its lead judgement read by Justice Emmanuel Agim, the apex court said state governors can’t hold on to funds meant for local government administrations.
READ ALSO: Supreme Court to deliver judgment on LG Autonomy tomorrow
Justice Agim said the refusal of the state government on financial autonomy for local governments has gone on for over two decades.
According to him, local governments have since stopped receiving the money meant for them from the state governors who act in their stead.
While noting that the 774 local government councils in the country should manage their funds themselves, he dismissed the preliminary objections of the defendants (state governors).
Justice Agim said the AGF has the right to institute the suit and protect the constitution.
Consequently, the apex court directed that local government allocations from the Federation Account should be paid directly to them henceforth.
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 mismanagement 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).
But the 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.
The 36 state governors, who are defendants in the suit, opposed the AGF for instituting the case.
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