Supreme Court Mandates Immediate Direct Disbursement Of LG Funds

The Supreme Court has conferred fiscal independence to the 774 local government councils in the country.

In a significant ruling on Thursday, the apex court mandated the Federal Government to promptly commence direct disbursement of local government funds to their dedicated accounts.

In its principal judgment read by Justice Emmanuel Agim, the apex court scolded the decades-long refusal of the state government on financial autonomy for local governments.

Justice Agim 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).

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

Justice Agim noted 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.

There are 774 local government areas in the country, but the effectiveness of the third tier of government has been hindered by the influence of certain domineering governors who have been accused of mismanaging funds allocated for the local governments administration.

Some months ago, 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.

Presently, 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.

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

But Justice Agim said the AGF has the right to institute the suit and protect the constitution.