The Supreme Court has decreed that, starting immediately, the federal government must directly allocate funds to local government councils from the federation account.
In the judgment delivered on Thursday, a seven-member panel of justices asserted that state governments persist in abusing their authority by withholding and appropriating funds designated for LGAs.
AGF’s prayer
The AGF prayed the court to direct allocation of funds from the federation account to the local governments.
He sought an order to prohibit the unlawful dissolution of local government administration and the appointment of caretaker committees by state governors to run the councils
The suit rests on 27 grounds asserting that the Constitution of Nigeria recognizes federal, state, and local governments as three tiers of government.
It also stated that these tiers draw funds for their operation from the federation account created by the constitution.
The originating summons states, “The constitution mandates a democratically elected local government system and does not provide for any other governance system at the local level.
It further contended that despite the clear constitutional provisions, governors have neglected to establish democratically elected local government systems even in the absence of a state of emergency warranting the suspension of democratic institutions.”
Background
In 2018, the National Assembly passed constitutional amendments as part of the Fourth Alteration Bill, aimed at granting financial and administrative autonomy to local governments which was signed into law by former President Muhammadu Buhari.
These amendments included provisions for direct allocation of funds from the federation account to local governments and independence in staff recruitment and management. However, the implementation of these amendments faced significant resistance from state governors.
Several states refused to implement the constitutional amendments and this refusal led to a political impasse, with local government officials across the country complaining of undue interference from state governments and lack of funds to carry out their constitutional responsibilities.
In response to this deadlock, the Federal Government, through the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi approached the court in suit number SC/CV/343/2024, seeking full autonomy for the country’s 774 local governments.
The Attorney General argued that continuing to disburse funds from the Federation Account to states lacking democratically elected local governments undermines constitutional integrity.
He asserted that, given these constitutional violations, the federal government is not obligated under Section 162 to provide funds allocated for local governments to states without democratically elected local authorities.
The case filed by the FG argues that the constitutional amendments granting autonomy to local governments should be binding on all states.
It contends that state governments’ control over local government funds hampers development at the grassroots level and goes against the spirit of the constitution.
The Attorney General noted that despite legal requirements, governors have consistently failed to establish democratically elected local governments, even in the absence of declared emergencies that might justify suspending democratic institutions.
On the other hand, state governors, through the Nigeria Governors’ Forum, argued that local governments are under the purview of state governments as per the federal structure.
They contend that full autonomy for local governments could undermine the current federal arrangement and potentially lead to mismanagement of funds at the local level.
Courts decision
In its judgment delivered on Thursday, a seven-member panel of justices of the Supreme Court ruled that the federal government must now directly pay allocations to local government councils from the federation account.
The ruling emphasized that state governments have persistently misused their authority by withholding and utilizing funds intended for LGAs.