Amid efforts to implement the Supreme Court ruling on local government autonomy, Nigerian state governors are reportedly lobbying President Bola Tinubu to halt the direct disbursement of federal allocations to local councils.
According to sources, several governors met with President Tinubu at the State House in Abuja last Tuesday, following an Iftar dinner, to express concerns over the Central Bank of Nigeria (CBN) handling local government allocations.
Governors Push for Control Over LG Funds
The governors argue that local councils have multi-billion-naira debts that need to be settled before financial autonomy can take effect. They are also resisting the CBN’s directive for local governments to open accounts with the apex bank, fearing that it would place too much federal control over council funds.
A source revealed:
“The governors are against the idea of using the CBN because it means approvals will go through the Accountant-General of the Federation, giving the Federal Government leverage over local government finances.”
Instead, the governors prefer that allocations be deposited into commercial bank accounts, which would keep state governments in control of the funds.
Supreme Court Ruling on LG Autonomy
The dispute follows a Supreme Court ruling on July 11, 2024, which mandated that local government allocations must be paid directly to their accounts, bypassing state governments. The ruling also declared that only democratically elected local government officials—not caretaker committees appointed by governors—can receive federal funds.
To enforce the ruling, the CBN has mandated all local governments to submit a two-year account audit before receiving funds. Additionally, the apex bank has begun profiling local government chairmen and account signatories across the 774 LGAs.
CBN Under Pressure Amid Resistance
Meanwhile, the National Union of Local Government Employees (NULGE) has warned the CBN against allowing governors to obstruct local government autonomy. There are reports that the CBN has refused to open accounts for some LGAs over alleged non-compliance with audit requirements.
As tensions rise, it remains to be seen how the Federal Government will navigate the standoff between governors and local councils over financial independence and direct allocation control.
