Governors Resist Direct LG Fund Allocation, Lobby Tinubu for Delay
State governors have intensified efforts to delay the implementation of the Supreme Court ruling on local government (LG) financial autonomy, opposing the planned direct disbursement of federal allocations to LG accounts.
During a meeting with President Bola Tinubu at the State House, Abuja, last Tuesday, some governors objected to routing LG funds through the Central Bank of Nigeria (CBN), citing outstanding multi-billion dollar debts allegedly incurred by local councils
Presidency sources revealed that the governors used the Iftar dinner as an opportunity to lobby Tinubu, urging him to allow LG funds to be deposited in commercial banks instead of the CBN.
“One of the governors argued that with the CBN handling the accounts, approval from the Accountant-General would still be required, effectively keeping the funds under federal control,” a source disclosed. “They prefer commercial banks, but the FG is pushing back.”
The meeting’s outcome remains uncertain, but reports indicate that direct allocation to LGs is being stalled
On July 11, 2024, the Supreme Court ruled that federal allocations to LGs must be paid directly into their accounts, bypassing state governments. The judgment declared that state governments’ control over LG funds was unconstitutional.
Additionally, the court stipulated that only democratically elected LG administrations could receive federal funds, invalidating the widespread practice of appointing caretaker committees
In compliance with the ruling, the CBN mandated LGs to submit a two-year audit before disbursement. It also began opening accounts for LGs and profiling chairmen and signatories to ensure transparency.
However, the National Union of Local Government Employees has accused the CBN of aiding governors in delaying financial autonomy by allegedly refusing to open accounts for some councils over non-compliance issues.
Similarly, the Association of Local Governments of Nigeria (ALGON) stated that it had not received official communication from the CBN regarding the new account system.
Despite the Supreme Court ruling, direct allocation to LGs has faced ongoing resistance and logistical hurdles. On March 2, 2025, reports indicated that the former Accountant-General of the Federation, Oluwatoyin Madein, and the Attorney-General, Lateef Fagbemi, had begun discussions on enforcing LG autonomy.
However, a key challenge remains identifying LGs with democratically elected officials, as highlighted in the minutes of the Federation Account Allocation Committee’s technical subcommittee meeting.
On January 1, 2025, President Tinubu denied any conflict with governors over LG autonomy, urging collaboration instead. “There were rumors of disagreements, but we need cooperation. Let’s work together to drive development at the grassroots level,” he said while addressing the Nigeria Governors Forum in Lagos
According to report the Secretary-General Mohammed Abubakar revealed that governors were pressuring the CBN to delay direct allocations, citing multi-billion dollar liabilities incurred on behalf of LGs.
“The FG also has its challenges. Governors are claiming that LG debts must be settled before autonomy can take effect. This issue needs to be carefully addressed,” Abubakar noted.
He warned that LG funds could be diverted to settle debts, emphasizing the need for transparency and stakeholder engagement
Abubakar further expressed concerns that local government funds could be mismanaged due to court-ordered financial settlements involving consultants.
“There are ongoing legal disputes between the CBN and consultants claiming payments for services rendered to LGs. If autonomy is not handled properly, LG funds could be lost to these claims,” he cautioned.
He urged LG chairmen to engage their state governors diplomatically to ease concerns about autonomy disrupting existing relationships.
Abubakar attributed the delays to a lack of clear directives from the CBN on account submissions and signatory verification. He called for transparency in the process, urging the FG to provide detailed guidelines to LG chairmen.
“We need proper information. Which CBN department is handling this? How should LGs engage? Everything should be made public,” he said.
He also called on the Attorney-General’s office to coordinate discussions with stakeholders, including ALGON and the Nigerian Union of Local Government Employees, to ensure smooth implementation.
“If all stakeholders are involved, financial autonomy can be implemented quickly and effectively,” Abubakar concluded.
[logo-slider]
