Key Points
- Supreme Court declares it unconstitutional for state governors to hold LG funds.
- Judgment delivered by Justice Emmanuel Agim.
- The ruling ends over two decades of financial control by state governors over local governments.
- The court dismissed preliminary objections from state governors.
- Local governments to manage their funds independently.
- The ruling supports increased calls for local government autonomy.
- Federal Government, led by AGF Lateef Fagbemi, sued state governors over LG fund mismanagement.
- The court directs that LG allocations from the Federation Account be paid directly to local governments.
In a significant judgment delivered on Thursday, the Supreme Court declared it unconstitutional for state governors to withhold funds meant for Local Government (LG) administrations, ordering the Federal Account Allocation Committee to henceforth pay allocations directly to the local governments.
This ruling marks a pivotal moment in the ongoing struggle for financial autonomy at the local government level.
Background
For over twenty years, state governors have retained control over funds allocated to local governments, significantly impacting the efficiency and autonomy of the 774 local government councils across the country.
This practice has been widely criticised, with governors accused of mismanaging funds intended for local administrations.
Calls for Autonomy
In recent months, there has been a growing demand for local government autonomy in Nigeria. President Bola Tinubu has voiced support for these calls.
Also Read: FAAC: Federal, state, local governments get ₦2.33 trillion in March, ₦1.87 trillion in April 2024
In May, the Federal Government, through Attorney-General of the Federation (AGF) Lateef Fagbemi, filed a lawsuit against the 36 state governors, accusing them of misconduct regarding local government funds.
In the suit, hinged on 27 grounds, the federal government through the AGF prayed the Supreme Court to authorise the direct transfer of funds from the Federation Account to local governments, in accordance with the nation’s constitution.
“That the constitution of Nigeria recognises federal, state and local governments as three tiers of government and that the three recognised tiers of government draw funds for their operation and functioning from the federation account created by the constitution,” the originating summons read.
“That by the provisions of the constitution, there must be a democratically elected local government system and that the constitution has not made provisions for any other systems of governance at the local government level other than the democratically elected local government system.
“That in the face of the clear provisions of the constitution, the governors have failed and refused to put in place a democratically elected local government system even where no state of emergency has been declared to warrant the suspension of democratic institutions in the state.
“That the failure of the governors to put democratically elected local government system in place is a deliberate subversion of the 1999 Constitution which they and the President have sworn to uphold.
“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.”
Federal and Local Government Revenue Allocation
Currently, the distribution of monthly revenue in Nigeria allocates 52.68 per cent to the Federal Government, 26.72 per cent to state governments, and 20.60 per cent to local governments.
These funds are paid into a joint account operated by both state and local governments. This system has been a source of contention, with local governments often not receiving their full allocations.
Supreme Court Judgment
Justice Emmanuel Agim, in delivering the lead judgement, emphasised that local governments should manage their funds themselves, free from state government control.
Justice Agim dismissed the preliminary objections raised by the state governors and affirmed the AGF’s right to file the lawsuit in defence of the constitution.
Future Implications
This ruling by the Supreme Court mandates that allocations from the Federation Account be paid directly to local governments henceforth. This decision is expected to enhance the financial independence and operational efficiency of local government councils, paving the way for improved governance at the grassroots level.
This is a developing story.
