The Presidency has announced that, starting at the end of January, all 774 local government areas in Nigeria will begin receiving their federal allocations directly. This move, aimed at strengthening local government autonomy, follows a landmark Supreme Court ruling and months of preparation by the Federal Government.
The Special Adviser to the President on Media and Public Communications, Sunday Dare, disclosed this during an interview on Arise News on Thursday night. He emphasized that President Bola Tinubu is committed to ensuring that local governments gain full financial independence.
“We have a President who ensures local government autonomy,” Dare said. “From the end of this month, local governments will receive their money directly.”
Supreme Court Ruling Drives Change
The push for direct funding stems from a July 2024 Supreme Court ruling, which declared the state government’s retention of local government funds unconstitutional. Justice Emmanuel Agbim, delivering the unanimous judgment, stated, “Demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay local government allocations to the LGs directly or pay them through the states. In this case, since paying them through states has not worked, justice of this case demands that LG allocations from the federation account should henceforth be paid directly to the LGs.”
The court further ruled that state governments have no power to control or withhold funds meant for local councils. This judgment came after the Attorney General of the Federation, Lateef Fagbemi (SAN), filed a suit seeking full autonomy and direct funding for local governments.
Despite the ruling, the Federal Government delayed its enforcement to establish systems for a smooth transition. However, Dare confirmed during the interview that the long-awaited direct funding would finally take effect this month.
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Local Governments Anticipate Significant Increases
The new funding structure is expected to greatly increase local governments’ financial resources. Dare shared an example of a local government chairman who expressed excitement over the change, saying, “I spoke to a local government chairman who said, ‘Oh, I will be getting N2.9bn, instead of the N200m I was getting before.’”
This significant boost is expected to empower local governments to execute developmental projects and improve service delivery at the grassroots level.
Shifting Focus to State and Local Governments
Dare also highlighted the need to hold state and local governments accountable for their use of federal allocations. He cited an example of a state that received N499 billion last year, nearly four times its previous allocation, yet showed little visible improvement.
“Blaming the Federal Government all the time, I think we need to revert it,” Dare said. “The framers of our constitution, who said we should have the federal, state, and local governments, it’s for a reason. The Federal Government cannot take care of the entire country.”
He urged Nigerians to scrutinize the actions of state and local governments more closely. “The Federal Government collects the allocation, it doesn’t take 100 per cent, but distributes it. We have to find out what the states are doing with the allocation,” he added.
This development marks a significant step toward decentralization and grassroots empowerment in Nigeria. As local governments prepare for direct funding, stakeholders and citizens alike will be watching to see how this new financial independence translates into tangible improvements in local communities.