The Association of Local Governments of Nigeria (ALGON) has embarked on a protracted legal battle to secure the financial autonomy of local governments, a right affirmed by the Supreme Court but seemingly thwarted by the Office of the Attorney General of the Federation (AGF). ALGON’s core contention revolves around the AGF’s directive for the Central Bank of Nigeria (CBN) to establish uniform accounts for all local governments, a move perceived as undermining the essence of local autonomy granted by the Supreme Court ruling. This directive, according to ALGON, contradicts the court’s recognition of local governments as an independent tier of government, entitled to manage their own finances. Instead of embracing decentralization, the AGF’s actions appear to reinforce centralized control over local government funds, a stark contrast to the spirit of the court’s decision.
ALGON’s lawsuit, filed in the Federal High Court, Abuja, seeks not only the inclusion of local governments in the Federation Account Allocation Committee (FAAC) but also the unfettered right to manage their allocated funds. Naming key figures in the financial administration of the country, including the Minister of Finance, Wale Edun; Minister of Budget and National Planning, Abubakar Bagudu; Accountant-General of the Federation; the CBN; Nigerian National Petroleum Company Limited (NNPCL); and several commercial banks, the suit highlights ALGON’s determination to ensure that local governments have direct access to their constitutionally allocated resources. The Supreme Court’s July 11, 2024 ruling explicitly stated that local government allocations should be paid directly to their accounts, effectively granting them full financial autonomy. However, the implementation of this ruling has encountered significant roadblocks, primarily stemming from the AGF’s office and the CBN.
The CBN, acting on the AGF’s directive, has reportedly imposed a prerequisite for local governments to submit two years of audited financial reports before their accounts can be opened. This requirement, ALGON argues, was not stipulated in the Supreme Court judgment and serves as an unnecessary hurdle in the implementation of the court’s decision. ALGON maintains that this condition not only delays the release of much-needed funds but also imposes an undue burden on local governments, particularly those facing resource constraints. This demand, seen as a deliberate impediment to local government autonomy, further fuels ALGON’s suspicion that the AGF’s office is actively working against the implementation of the court’s ruling.
ALGON’s Secretary-General, Muhammed Abubakar, has publicly criticized the AGF’s actions, stressing that they contravene the principle of local autonomy. He emphasizes that the AGF’s directive to the CBN centralizes a process that should be decentralized, effectively negating the very concept of autonomy. He argues that genuine autonomy entails allowing each local government the freedom to choose its own bank and receive its allocations directly, without any intermediary or imposed conditions. This direct control over finances, ALGON believes, is crucial for local governments to effectively carry out their responsibilities to their constituents. The current situation, where funds are routed through centralized channels, creates delays and compromises the ability of local governments to address pressing local needs.
The lack of direct funding, months after the Supreme Court’s ruling, reinforces ALGON’s frustration and underscores the urgency of their legal action. Abubakar asserts that ALGON’s objective is not to have the funds channeled through the association itself, but rather to ensure that each local government area (LGA) receives its allocation directly into its chosen bank account. This direct access to funds, they believe, is the only way to truly achieve financial autonomy and empower local governments to fulfill their developmental mandates. The current impasse, with no local government having received direct funding from FAAC, demonstrates the gap between the legal affirmation of autonomy and its practical implementation.
While ALGON continues to press its case in court, seeking to enforce not just the letter but also the spirit of the Supreme Court ruling, the Office of the Attorney General of the Federation remains silent on the matter. Citing the sub judice rule, the Special Adviser to the President on Communication and Publicity in the AGF’s office, Kamarudeen Ogundele, declined to comment on the ongoing legal proceedings. This silence, however, adds another layer of complexity to the situation, leaving local governments in continued financial limbo while awaiting the court’s decision. The outcome of this legal battle will have far-reaching implications for the future of local governance in Nigeria, determining the extent to which local governments can exercise their constitutional right to financial autonomy and effectively serve their communities.
