When in July 2024, the Supreme Court gave a ruling that effectively granted financial autonomy to the 774 local government councils in the country, the development was received with mixed reactions. While many celebrated the position of the nation’s apex court with regards to the third tier of government, Nigerian governors were clearly not happy because, over the years, the state chief executives have appropriated the resources meant for the local governments to themselves.
Indeed, the governors’ total grip on the local government was so strong that many considered the implementation of the Supreme Court judgment impossible. Even Justice Emmanuel Agim, who read the lead judgment of the apex court, alluded to the governors’ influence when he scolded the decades-long refusal of the state governments on financial autonomy for local governments.
The governors had in 2019 under then President Muhammadu Buhari successfully frustrated the decision by the Nigerian Financial Intelligence Unit (NFIU) regulating transactions on State and Local Governments Joint Accounts, limiting cash withdrawals from local governments accounts to a maximum amount of N500,000 per day with penalties for banks that failed to comply.
But, the Bola Tinubu administration was determined to implement the judgment. It followed through by setting up a 10-member inter-ministerial committee to implement the Supreme Court judgment. In a broadcast marking Nigeria’s 64th Independence anniversary, President Bola Tinubu said, “As part of our efforts to re-engineer our political economy, we are resolute in our determination to implement the Supreme Court judgment on the financial autonomy of local governments.”
However, the state governors continued their lobby against the enforcement of the Supreme Court judgment. The governors have continued to mount pressure on top officials of the Tinubu Administration to soft-pedal on the implementation of the apex court judgment.
As a result of these developments, government’s actions have been subjected to all sorts of interpretations, most of them wide off the mark. For instance, consider the story titled “LGAs financial autonomy faces fresh hurdle on CBN demand” in the Business Day of February 2, 2025. According to the story, which relied on sources, “Local governments across Nigeria are facing a new challenge in their push to receive monthly allocations directly from the federation accounts, as they must now submit a two-year account audit to the Central Bank of Nigeria (CBN) before funds can be disbursed.”
Continuing, it said: “The direct revenue remittance, initially scheduled to begin in January, was postponed after many of the 774 local councils failed to provide the required account details. As a result, their N361.754 billion share from the total N1.424 trillion distributable revenue for the month was routed through the state governments.
“The CBN has begun the process of opening accounts for local governments to facilitate direct payments, in line with the financial autonomy secured through a Supreme Court ruling in July 2024.
“However, with the next allocation due in a few weeks, concerns are growing over the ability of councils to submit the mandated audit reports before the February meeting of the Federation Account Allocation Committee (FAAC).
Sources at the CBN confirmed that the bank would not proceed with account openings without a clear understanding of each local government’s financial position.”
Why should a move aimed at ensuring accountability, probity, and transparency be considered a hurdle? Are we saying that local governments have no record of their spending? What exactly are you trying to say.
The CBN, we must not forget, is an independent institution with its own standard operating procedure (SOP). But it is also held accountable by relevant government institutions and agencies. If the CBN is expected to always present its audited report despite its independence, why should LGs not be subjected to the same?How many Nigerians will be satisfied with CBN explanation when the figures fail to add up?
Sadly, rather than support CBN’s position on accountability, the National Union of Local Government Employees (NULGE), through its National President Hakeem Ambali, is warning the apex bank against aiding state governors in undermining the financial autonomy of local government councils.
“There is no local government without at least three years of audited accounts. This is made possible due to the presence of the Auditors-General at the local government levels.
“The CBN must understand that it can not go against a landmark Supreme Court judgment. No organisation should allow itself to be used by governors against the realisation of the autonomy for local governments,” Ambali was quoted by The PUNCH as saying.
So, if truly LGs have at least three years of audited accounts, the logical question to ask is: what makes it difficult to present such audited reports and satisfy the said CBN demand?
Unlike local governments, which can still be influenced by state governors through the instrumentality of state electoral bodies, the CBN is not beholden to state governments in any way. While majority Nigerians are in support of LG autonomy so that developmental projects can be executed at the grassroots level, it will be suicidal to do so in a vague and fraudulent way. Going to court, and whatever the outcome, can not change this fact.
Nasir is a journalist based in Abuja
