The Nigerian government has directed all 774 local government areas (LGAs) in the country to open dedicated accounts with the Central Bank of Nigeria (CBN) to enable direct disbursement of allocations from the federation account.
This directive aligns with the Supreme Court’s recent ruling mandating direct allocation of federal funds to LGAs. The National President of the Association of Local Governments of Nigeria (ALGON), Bello Lawal-Yandaki, disclosed this during a press briefing in Katsina on Sunday.
Mr. Lawal-Yandaki emphasized that the move is crucial for implementing the court’s decision and ensuring that funds meant for local governments are directly accessible without interference. However, he noted that the implementation process is still ongoing.
“The CBN is presently awaiting directives from the Federal Government to open local government accounts for the respective states, which can be done between 24 and 48 hours for each,” Mr. Lawal-Yandaki explained.
Despite the clear mandate, the process has faced delays. Mr. Lawal-Yandaki attributed this to local councils failing to provide necessary banking details to the Federation Accounts and Allocation Committee (FAAC), a requirement for facilitating the payments.
“There’s no cause for alarm,” he assured. “We are just rounding off meetings and making submissions to the federal government for implementation, and there’s no set timeline.”
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He added that a subcommittee had been established to address unresolved issues and engage with key stakeholders, including labor unions, local government chairmen, and the National Union of Local Government Employees (NULGE).
“We’ve already met relevant stakeholders, and there’s a general agreement that the commencement of direct federal revenue allocations to LGs will be this January,” Mr. Lawal-Yandaki stated confidently.
The directive is seen as a significant step toward granting financial autonomy to local governments, a long-standing demand by advocates of grassroots development in Nigeria. Direct allocation of federal funds to LGAs is expected to curb the diversion of resources and enhance service delivery at the local level.
Stakeholders across the country are optimistic that the Supreme Court ruling and the government’s action will pave the way for a more transparent and effective use of public funds at the local government level.