State Governors Pressure Tinubu to Halt Direct LGA Allocations Amid Pushback Against Supreme Court Verdict

State governors are mounting pressure on President Bola Tinubu to stall the implementation of direct financial allocations to local government councils, a move that would enforce the Supreme Court’s July 2024 judgment granting full fiscal autonomy to the third tier of government.

During a private meeting at the State House in Abuja last Tuesday, following an Iftar dinner, some governors reportedly lobbied the President to reconsider the plan for local government allocations to be paid via the Central Bank of Nigeria (CBN). The governors argued that routing the funds through the apex bank would keep the process under federal control, requiring oversight from the Accountant-General of the Federation—something they are strongly resisting.

Presidency insiders told SK Blog that the state executives are advocating for funds to be sent to commercial bank accounts instead. “They believe that giving the CBN control makes the federal government the gatekeeper, and they want to avoid that,” said a source familiar with the discussions. Despite the CBN’s insistence on auditing LGA accounts and profiling council chairmen, the governors are citing liabilities allegedly incurred by LGAs to delay compliance.

The Supreme Court’s 2024 ruling had declared it unconstitutional for state governments to manage federal allocations meant for local governments, mandating direct disbursement to democratically elected councils. It also barred the practice of appointing caretaker committees, insisting only elected officials can access and manage these funds.

In response to the ruling, the CBN began the process of opening dedicated accounts for the 774 LGAs and mandated a two-year audit submission. However, nine months later, implementation remains stalled, with competing interests and logistical bottlenecks hampering progress.

A key concern raised by the governors is the accumulation of multi-billion dollar debts attributed to LGAs. They are reportedly urging the federal government and the CBN to allow deductions from LGA allocations to offset these debts. This has sparked fears that direct payments might still be diverted or misused.

The Association of Local Governments of Nigeria (ALGON) and the National Union of Local Government Employees (NULGE) have raised red flags over these developments. ALGON’s Secretary-General, Mohammed Abubakar, warned that without proper coordination and transparency, local governments could lose funds to questionable debt settlements and court judgments linked to past contracts and consultants.

He also accused the CBN of failing to provide clear guidelines for LGAs to access their funds, noting that most council chairmen remain in the dark on how to proceed. “You can’t just tell chairmen to go to the CBN without stating who to see, what department to approach, or what documents to submit. The process must be clearly outlined,” Abubakar said.

Abubakar stressed the importance of involving stakeholders—such as ALGON, NULGE, and local government professionals—in designing the framework for implementation. He cautioned that if the process continues to be handled behind closed doors by federal committees, the rollout of autonomy could become ineffective or even counterproductive.

Despite the tensions, President Tinubu has maintained a conciliatory tone. During a New Year address in Lagos, he dismissed rumours of a rift with governors over the autonomy issue, calling instead for collaboration. “We are not in a fight. Let’s work together to restore hope at the grassroots,” Tinubu said.

Nonetheless, concerns persist that political considerations and financial entanglements may continue to stall a reform that many see as crucial to strengthening governance and service delivery at the local level.