Autonomy: FG Explains Delay in Direct Payment to LGAs

The Nigerian government has revealed that 749 out of 774 local government areas (LGAs) have failed to submit their account details, a critical requirement for implementing financial autonomy as directed by the Supreme Court.

According to the Office of the Accountant General of the Federation (OAGF), the lack of account details and the need to verify democratically elected local government administrations remain significant hurdles in enforcing the July 11, 2024, Supreme Court ruling on local government autonomy. The Federation Account Allocation Committee Technical Sub-Committee, chaired by Accountant General Oluwatoyin Madein, highlighted these challenges in its recent meeting.

The OAGF, in collaboration with the Office of the Attorney General of the Federation and Minister of Justice, has begun discussions to resolve these setbacks. According to the meeting minutes obtained over the weekend, only Delta State, with its 25 local governments, has so far complied with the requirement to submit account details.

Madein acknowledged that establishing a system for direct allocation was crucial but complicated by the difficulty in identifying local governments with constitutionally elected leadership. She emphasized that, even where proper leadership structures exist, mechanisms for ensuring direct allocation still need to be defined due to various complexities.

Meanwhile, the Central Bank of Nigeria (CBN) has begun profiling the chairmen and signatories of all 774 local government accounts as part of its financial accountability measures. The Director of Legal Services at the CBN, Kofo Salam-Alada, explained that this process aligns with the standard Know Your Customer (KYC) procedure. However, the Association of Local Governments of Nigeria (ALGON) has claimed that it has yet to receive any official communication from the apex bank regarding the process.

ALGON Chairman in Abia State, Chinesu Ekeke, stated that no local government chairman had been invited for signatory verification. He noted that he was unaware of any official directive from the CBN, either at the state or national level.

This development comes amid concerns raised by the National Union of Local Government Employees, which previously warned the CBN against assisting state governors in undermining local government financial autonomy.

The Supreme Court had ruled in July 2024 that state governors must stop controlling funds meant for local governments. It directed the Accountant General to pay local government allocations directly, declaring the previous practice unconstitutional. However, eight months after the landmark ruling, financial autonomy for local governments remains unimplemented.