Supreme Court Ruling: Local Governments to Gain Financial Independence
In a significant ruling on Thursday, the Supreme Court declared it unconstitutional for state governors to withhold funds meant for Local Government (LG) administrations. Additionally, the court ruled that governors cannot dissolve democratically elected Local Government councils.
This landmark decision, delivered by Justice Emmanuel Agim, emphasized that withholding financial autonomy from local governments violates the 1999 Constitution. The court highlighted that local governments have been denied their rightful funds by state governors for over two decades.
Justice Agim stated that all 774 local government councils should manage their own funds, rejecting the state governors’ preliminary objections.
The Journey to Local Government Autonomy
Nigeria has 774 local government areas, but their efficiency has been hindered by state governors accused of mismanaging local government funds. Recently, calls for local government autonomy have intensified, with President Bola Tinubu backing these calls. In May, the Federal Government, represented by Attorney-General Lateef Fagbemi, sued the 36 state governors over alleged misconduct concerning local government funds.
Currently, the Federal Government receives 52.68% of the country’s monthly revenue, states get 26.72%, and LGs receive 20.60%. These funds, allocated by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and disbursed by the Federation Account Allocation Committee (FAAC), are paid into joint accounts operated by state and local governments.
The Federal Government’s Legal Action
The Federal Government’s suit aimed to prevent governors from dissolving elected councils arbitrarily. The Attorney-General’s suit, based on 27 grounds, sought to protect local government funds from being mismanaged by state governors.
The Supreme Court’s Verdict
Justice Agim affirmed that the Attorney-General has the right to protect the constitution through this suit. The Supreme Court ordered that Local Government allocations from the Federation Account be paid directly to them, bypassing state government control. Justice Agim stressed that state governors’ retention of these funds disrupts local government activities and ordered immediate compliance with the ruling, ensuring that funds intended for Local Governments reach them directly.
This decision marks a crucial step towards financial independence and efficiency for local governments in Nigeria.
