BREAKING: Governors Reportedly Truncate Direct Payment Of Federal Allocations To LGs

Governors have reportedly moved to truncate direct payment of federal allocations to LGs.

NaijaOnPoint Nigeria reports that state governors are reportedly making renewed efforts to delay the implementation of the Supreme Court ruling on local government autonomy by opposing the planned disbursement of federal allocations directly to local government councils.

During a recent meeting with President Bola Tinubu at the State House, Abuja, the governors objected to routing the funds through the Central Bank of Nigeria, CBN, citing concerns over multi-billion dollar debts allegedly incurred by the councils.

The governors used the opportunity of an Iftar dinner with the President to lobby against direct allocations to LGAs. Insiders revealed that some governors met Tinubu privately to push for disbursement through commercial banks instead of the CBN, arguing that federal control over the funds would remain intact if handled by the apex bank. However, the Federal Government insisted on using the CBN to ensure transparency and accountability.

The Supreme Court had ruled on July 11, 2024, that federal allocations to LGAs must be paid directly to their accounts, bypassing state governments. The ruling emphasized that state governments’ control over LGA funds was unconstitutional and that only democratically elected LGA officials could receive the allocations. However, the enforcement of this verdict has faced resistance and logistical hurdles.

To implement financial autonomy, the CBN required LGAs to submit a two-year audit before receiving funds. The apex bank also began profiling local government chairmen and account signatories. However, the National Union of Local Government Employees accused the CBN of aiding governors in obstructing the process by refusing to open accounts for some LGAs.

The Association of Local Governments of Nigeria, ALGON, also expressed concerns about the lack of formal communication regarding account openings.

Despite nine months since the ruling, direct allocation implementation has stalled. On March 2, it was learned that the Attorney-General and the immediate-past Accountant-General of the Federation had begun talks to enforce the ruling but were struggling to identify LGAs with democratically elected officials. The Federation Account Allocation Committee Technical Sub-Committee’s meeting minutes confirmed these challenges.

In response to the growing tensions, President Tinubu clarified on January 1, 2025, that his administration was not in conflict with governors over LGA autonomy. He urged state executives to collaborate in ensuring grassroots development rather than viewing the ruling as a power struggle. However, indications suggest that the Nigeria Governors’ Forum is pushing for further delays, citing debts incurred in the name of LGAs.

ALGON Secretary-General Mohammed Abubakar revealed that governors were pressuring the CBN to delay implementation to settle these debts, raising fears that local government funds could be diverted. He warned that haphazard execution of the Supreme Court judgment could lead to further mismanagement, calling for stakeholder engagement to prevent abuse.

Additionally, Abubakar raised concerns that the CBN’s legal disputes with consultants working for LGAs could lead to garnishee orders draining council funds. He stressed the need for clear implementation guidelines and broader consultations, urging the Attorney-General’s office and the Secretary to the Government of the Federation to involve key stakeholders to ensure a smooth transition to financial autonomy.

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