Local governments across Nigeria have begun the process of opening accounts with the Central Bank of Nigeria (CBN) in preparation for receiving direct federal allocations, starting this January.
This move follows the landmark judgment by the Supreme Court on July 11, 2024, which affirmed the financial autonomy of the 774 local government areas in Nigeria. The court ruled that the practice of state governors controlling local government funds was unconstitutional and directed that allocations should be paid directly into local government accounts.
However, despite the Supreme Court ruling, reports indicate that many governors have continued to manage LGA funds, six months after the judgment.
Previously, local governments operated joint accounts with state governments, where federation allocations were deposited. This often led to deductions or alleged mismanagement of the funds by state governors.
Speaking on Friday, the National Publicity Secretary of the Association of Local Governments of Nigeria (ALGON), Hamisu Anani, confirmed that local governments are working on opening accounts with the CBN as part of the process to implement the judgment.
Anani acknowledged that while progress was being made, challenges remain, especially for states where the CBN does not have a physical presence. He said, “Some of the states don’t have central banks, and ALGON is working on how to facilitate account openings with the central bank.”
He further added that discussions with state governors, finance commissioners, and the Attorney General of the Federation are ongoing to ensure smooth implementation.
“The process is not just about implementation but also sustainability. We are working to make sure the system remains effective over time. If it is not sustained, there will be issues,” Anani said. He also highlighted that key stakeholders have been working diligently to ensure that the allocation system is established and maintained in the right way.
ALGON is committed to ensuring that local government financial autonomy is fully implemented and sustained in the coming months.
