The Supreme Court of Nigeria has ruled that the 774 local government areas (LGAs) be given full financial autonomy across the federation.
A seven-man panel of Supreme Court Justices led by Justice Garba Lawal delivered the ruling on Thursday, July 11, 2024.
The apex court initially heard the suit between the federal and state governments on the autonomy of local governments on June 13 and reserved its judgment.
The suit, marked SC/CV/343/2024, was filed by the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), and sought full autonomy and direct fund allocation to the 774 local government areas (LGAs) in the country.
Fagbemi requested the Supreme Court to order that funds for LGAs managed by caretaker committees appointed by governors, rather than elected chairmen and councillors, be withheld.
However, the 36 state governors, represented by their attorneys general, opposed the suit on various grounds, including their argument that the Supreme Court lacks jurisdiction to hear the case.
In its ruling on Thursday, the Supreme Court ordered that full financial autonomy be granted to the LGAs, recognizing them as an independent segment of the federation.
Details of Ruling
In its ruling delivered by Justice Emmanuel Agim, the Supreme Court criticized the longstanding denial by state governments of financial autonomy to local governments.
Justice Agim emphasized that the 774 local government councils across the country should independently handle their finances. He stressed that these funds are meant solely for democratically elected local government administrations, not caretaker committees.
He dismissed the defendants’ (state governors) preliminary objections.
In addition, the Supreme Court mandated that allocations from the Federation Account intended for Local Governments must be directly paid to them henceforth, bypassing state government coffers.
Justice Agim said that the withholding of funds by state governors disrupts the operations of Local Governments.
He therefore ordered immediate compliance with the judgement, emphasizing that state governments are prohibited from receiving funds allocated for Local Governments.
LGAs Autonomy Reaffirmed
Nigeria currently has 774 local government areas (LGAs), yet the effectiveness of this third tier of government has been hindered by powerful and domineering governors accused of mishandling funds designated for local administration.
In recent months, demands for local government autonomy in Nigeria have grown louder, supported even by President Bola Tinubu.
In May, the Federal Government, represented by Attorney-General of the Federation Lateef Fagbemi, took legal action against all 36 state governors for alleged misappropriation of local government funds.
Presently, according to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) under the Presidency, the distribution of the country’s monthly revenue allocates 52.68% to the Federal Government, 26.72% to states, and 20.60% to local governments, disbursed through the Federation Account Allocation Committee (FAAC).
Interestingly, funds for local governments are deposited into a joint account managed by state governments and local governments within their jurisdictions.
However, these funds are rarely allocated to the local government chairmen, therefore bringing to question the effective practice of an independent local government.
With the supreme court ruling, the payment of FAAC meant for the third tier of government will be directly allocated to each local government.
