Local governments across Nigeria are set to start receiving direct allocations from the Federation Account beginning next month, barring any unforeseen changes.
This development, which stems from the July 11 Supreme Court ruling granting financial autonomy to local councils, will take effect with the disbursement of December’s allocation to the three tiers of government, a reliable source confirmed over the weekend.
The direct allocation process is expected to end the prolonged implementation delay of the judgment, which has faced resistance from several state governors.
The governors, dissatisfied with the ruling, have subtly resisted breaking the joint state/local government account system into which council funds have traditionally been deposited.
A member of the Inter-Ministerial Committee established to enforce the Supreme Court’s ruling disclosed that all arrangements for the direct allocation have been finalised. According to the committee, full implementation will commence in January 2025.
Gradual Transition to Full Implementation
While some local governments have already begun receiving their funds directly, the committee assured that all 774 local councils in Nigeria would be fully integrated into the direct allocation system by January. The Accountant-General of the Federation is expected to authorise the rollout after a review meeting in the same month.
“This is a pivotal moment in Nigeria’s governance framework,” the source said. “The committee will also address attempts by some governors to undermine the autonomy of elected local government officials, ensuring they are not coerced into serving state interests.”
Concerns Over Governance Interference
The push for local government financial independence has been met with challenges. For instance, the Edo State House of Assembly recently suspended elected local government chairmen and deputies for allegedly failing to submit financial statements as directed by Governor Monday Okpebholo.
Reacting to this, the source criticised the move as undemocratic, stating: “Dissolving democratically elected local councils undermines the autonomy granted to them and reduces their ability to function independently.”
Federal Support for Financial Autonomy
President Bola Ahmed Tinubu has expressed strong support for local government autonomy. The inter-ministerial committee, chaired by Secretary to the Government of the Federation George Akume, includes key federal officials such as Coordinating Minister of the Economy Wale Edun, Attorney-General of the Federation Lateef Fagbemi (SAN), Minister of Budget and Economic Planning Abubakar Bagudu, and others.
The committee has endorsed the implementation of constitutional provisions recognising local councils as the third tier of government.
Attorney-General Fagbemi has also warned of legal consequences for governors who fail to comply with the Supreme Court ruling, emphasising that local government autonomy is essential for grassroots development.
“Any chairman found diverting funds will face strict legal actions,” Fagbemi said, reiterating the commitment to holding officials accountable.
This move is seen as a critical step toward empowering local councils to fulfil their constitutional responsibilities without interference from state executives.
