State governors have intensified efforts to delay the direct payment of federal allocations to local government councils, continuing their opposition to the Supreme Court ruling on local government autonomy.
At a meeting with President Bola Tinubu at the State House, Abuja, on Tuesday, some governors voiced strong opposition to the plan to transfer local government allocations via the Central Bank of Nigeria (CBN), citing the need to resolve significant debts allegedly incurred by councils.
Sources close to the presidency stated that the governors used the Iftar dinner as an opportunity to lobby Tinubu and press for direct payments to councils, a process that has been delayed.
A source told The PUNCH, “The governors came on Monday for Iftar and requested a meeting with the President, which they had on Tuesday afternoon. Some of the governors stayed with him for several hours, leaving after six in the evening.”
One insider, who requested anonymity, elaborated, “The discussion is centered on two issues. The federal government insists that allocations should be paid directly to the CBN and that local governments open accounts with the bank. However, the governors oppose this, arguing that it still allows federal control over the process.”
The source further revealed, “The governors prefer the funds to go to commercial banks instead of CBN accounts. They argue that using the CBN would still require approval from the Accountant-General, keeping the funds under federal control.”
Despite the unresolved issues, the meeting was described as productive, though the final agreement remains unclear. The key takeaway is that local government allocations have yet to be paid due to the ongoing negotiations.
Historically, local government funding has been contentious, primarily due to the power struggles between state and local governments.
On July 11, 2024, the Supreme Court ruled that federal allocations to local governments must be paid directly to their accounts, bypassing state governments. This decision came after the federal government filed a lawsuit demanding fiscal autonomy for local governments, as guaranteed by the 1999 Constitution.
The court ruled that state governments managing LGA funds was unconstitutional and ordered an immediate cessation of the indirect payment system. Additionally, the ruling decreed that only democratically elected local government officials should be eligible to receive federal funds.
Meanwhile, the Central Bank of Nigeria has mandated that local governments submit a two-year account audit before funds can be disbursed. The CBN has also begun opening accounts for local governments to facilitate direct payments.
In February, the CBN announced that it had started profiling local government chairmen and identifying signatories to these accounts as part of the financial autonomy implementation process.
The National Union of Local Government Employees (NULGE) has warned the CBN against aiding governors in obstructing financial autonomy, citing reports of some councils being denied accounts due to failure to comply with auditing requirements.
The Association of Local Governments of Nigeria (ALGON) has also reported receiving no formal communication from the CBN regarding the opening of accounts.
Despite these challenges, direct payments to local governments are still facing significant resistance nine months after the Supreme Court ruling.
On March 2, 2025, The PUNCH reported that talks had resumed between the former Accountant-General of the Federation, Oluwatoyin Madein, and Attorney-General Lateef Fagbemi, SAN, regarding the implementation of the Supreme Court’s ruling. However, complications remain in identifying local governments with democratically elected officials.
On January 1, 2025, President Tinubu reiterated that his administration was not in conflict with state governors over local government autonomy but emphasized the importance of collaboration for grassroots development.
Meanwhile, it has emerged that the Nigeria Governors’ Forum (NGF) is pushing for a delay in the implementation of direct payments, citing billions of dollars in debts reportedly accumulated in the name of local governments.
Mohammed Abubakar, Secretary-General of ALGON, disclosed to The PUNCH that governors are pressuring the CBN to delay implementation due to the liabilities tied to local governments in their states.
Abubakar explained, “The CBN is facing its own bottlenecks. Governors are making excuses related to the debts incurred by local governments, and these need to be properly addressed.”
He expressed concern that the delay in implementing the Supreme Court judgment could lead to the diversion of local government funds to settle debts, further harming local governments.
Abubakar also stressed the importance of involving all stakeholders in the process to avoid mismanagement of local government funds. He pointed out that without proper consultation, local government funds could end up being misused or siphoned off to settle debts without transparency.
He added that the CBN’s failure to provide clear guidelines on how local governments should engage in the process of receiving funds has also contributed to the delay.
Punch
