Supreme court grants full financial autonomy to local governments

The Supreme Court of Nigeria has ruled that the 774 local government areas (LGAs) across the federation be granted full financial autonomy, ending the longstanding control of state governors over LGA finances.

The ruling, delivered on Thursday, July 11, 2024, by a seven-man panel led by Justice Garba Lawal, mandates that allocations be disbursed directly to LGAs from the Federation Account.

The decision followed a suit filed by the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), seeking full autonomy and direct fund allocation to the LGAs. The federal government argued that funds should be withheld from LGAs managed by caretaker committees appointed by governors rather than elected chairmen and councillors.

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State governors, represented by their attorneys general, opposed the suit, arguing that the Supreme Court lacked jurisdiction. However, the court dismissed these objections, emphasizing the need for LGAs to independently handle their finances.

Justice Emmanuel Agim, delivering the ruling, criticized state governments for denying financial autonomy to local governments and ordered immediate compliance with the judgment. He stressed that funds allocated to LGAs should be used solely by democratically elected local government administrations, not by caretaker committees.

The ruling ensures that allocations from the Federation Account intended for local governments will be directly paid to them, bypassing state government coffers. Justice Agim highlighted that withholding funds disrupts the operations of local governments, thus mandating an end to this practice.

This landmark ruling is expected to enhance the effectiveness of the third tier of government in Nigeria, addressing long-standing issues of misappropriation and misuse of funds by state governors. The move has been welcomed by many, including President Bola Tinubu, who has supported local government autonomy.

In May, the federal government had taken legal action against all 36 state governors for alleged misappropriation of local government funds. The ruling ensures that Nigeria’s monthly revenue, distributed through the Federation Account Allocation Committee (FAAC), will see 20.60% directly allocated to local governments, ensuring their independence and proper functioning.