Supreme Court Judgment on Financial Autonomy for Local Governments Remains Unimplemented

Strategic Insights -

The Supreme Court of Nigeria issued a judgment in July 2024, granting financial autonomy to the country's 774 Local Government Areas. However, nearly a year later, the judgment remains unimplemented. The Attorney General of the Federation (AGF), Prince Lateef Fagbemi (SAN), had warned that any state government not complying with the judgment would face serious consequences. Despite this, the Office of the Accountant General of the Federation has not directed enforcement of the judgment, leaving the situation unclear.

Key Takeaways:

  • The Supreme Court judgment in July 2024 granted financial autonomy to the 774 Local Government Areas, but nearly a year later, the judgment remains unimplemented.
  • The Attorney General of the Federation (AGF) warned that any state government not complying with the judgment would face serious consequences.
  • The Office of the Accountant General of the Federation has not directed enforcement of the judgment, leaving the situation unclear.
  • The Central Bank of Nigeria (CBN) introduced a new condition requiring all local governments to provide at least two years of audited financial reports before receiving their allocations directly.
  • The CBN directive has raised concerns among local government officials, who consider it an additional bureaucratic hurdle to delay the implementation of financial autonomy.
  • The Association of Local Governments of Nigeria (ALGON) has filed a suit at the Federal High Court in Abuja challenging the non-compliance of state governments with the Supreme Court's ruling.
  • ALGON is seeking, among other reliefs, the inclusion of all 774 local government councils as participants in Federation Account Allocation Committee (FAAC) meetings.
  • The CBN, in its preliminary objection, urged the court to dismiss the suit on the grounds of lack of jurisdiction, arguing that ALGON is not a constitutionally or statutorily recognized legal entity.
  • ALGON has filed a counter-affidavit asserting its legal status, stating that it was duly incorporated on May 10, 2002, with the mandate to promote and defend the autonomy and interests of local governments across Nigeria.
  • Some governors allegedly resorted to intimidation and pressure on local government chairmen not to open designated CBN accounts to receive direct allocation.

Statistics:

  • 774: The number of Local Government Areas in Nigeria.
  • 2024: The year the Supreme Court judgment granting financial autonomy to Local Governments was issued.
  • 99(2): The section of the 1999 Constitution that the Supreme Court relied on to declare the practice of state governments retaining local government funds as unconstitutional.
  • 11/07/2024: The date the Supreme Court delivered the judgment.
  • May 29: The adjourned date for the hearing on ALGON's suit at the Federal High Court in Abuja.
  • 2 years: The number of years of audited financial reports required by the CBN for local governments to receive direct allocations.
  • 2002: The year ALGON was incorporated with the mandate to promote and defend the autonomy and interests of local governments across Nigeria.

Sources:

  • Nigerian Tribune
  • Supreme Court of Nigeria (2024)
  • Federal High Court of Nigeria
  • Central Bank of Nigeria (CBN)
  • Association of Local Governments of Nigeria (ALGON)
  • Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC)