The Association of Local Governments of Nigeria (ALGON) has initiated legal proceedings against the Federal Government, challenging the stalled implementation of local government autonomy. The lawsuit, filed at the Federal High Court in Abuja, seeks to compel the inclusion of local government councils in the Federation Account Allocation Committee (FAAC), the body responsible for disbursing federal funds. This legal action stems from the Federal Government’s failure to enforce a Supreme Court ruling issued eight months prior, mandating the direct payment of local government allocations to the councils themselves.
The crux of ALGON’s argument revolves around the Supreme Court’s July 2024 judgment, which declared the states’ practice of withholding local government funds unconstitutional. The court explicitly directed that these allocations be paid directly to the local governments, either by the federation or through the states, emphasizing that direct payment was necessary given the failure of the previous system where funds were channeled through state governments. However, despite this clear directive, local governments have yet to receive direct disbursements.
ALGON’s lawsuit names several key figures and institutions as respondents, including the Attorney-General of the Federation, the Ministers of Finance, Budget and National Planning, the Accountant-General of the Federation, the Revenue Mobilization, Allocation and Fiscal Commission, the Central Bank of Nigeria, the Nigerian National Petroleum Corporation Limited, commercial banks, and all 774 local government councils. The inclusion of such a broad range of respondents underscores the systemic nature of the issue and ALGON’s desire for a comprehensive solution.
A major obstacle to the implementation of the Supreme Court ruling has been the Central Bank of Nigeria’s (CBN) requirement that local governments provide at least two years of audited financial reports before they can receive direct allocations. This prerequisite, ALGON argues, further delays the implementation of local government autonomy and creates an unnecessary bureaucratic hurdle. ALGON contends that this requirement should not impede the direct disbursement of funds, as mandated by the Supreme Court. Their legal action seeks to overcome this impasse and ensure local governments gain control over their finances.
ALGON’s suit includes several key demands. Firstly, they seek a declaration that any disbursement of funds to local governments without their authorization and approval is illegal, regardless of whether the funds are channeled through commercial banks or other agencies. This emphasizes the principle of local government autonomy and their right to control their own finances. Secondly, they demand representation in FAAC or any other body responsible for allocating funds to local governments. This demand aims to give local governments a voice in decisions directly affecting their financial resources.
Furthermore, ALGON is seeking an order restraining the defendants from disbursing funds to local governments through any agency without the direct involvement of the councils themselves. This demand reinforces their claim to direct control over their allocations and aims to prevent any further delays or diversions of funds. By seeking these declarations and orders, ALGON hopes to secure the full implementation of the Supreme Court’s judgment and establish the financial autonomy of local governments in Nigeria. The case highlights the ongoing struggle for fiscal decentralization and raises questions about the effectiveness of judicial pronouncements in ensuring genuine local government autonomy. The outcome of this legal challenge will significantly impact the financial independence and operational capacity of local governments across the country.
