The Federation Account Allocation Committee (FAAC) has announced that statutory monthly allocations for the 774 local governments across Nigeria will not be directly disbursed this January due to their failure to submit required account details on time.
Instead, the allocations for the councils will be routed through the respective state governments. However, essential agencies such as the Universal Basic Education Commission (UBEC) and Primary Health Centres (PHC) will receive direct funding from the Federation Account to ensure their operations are not disrupted.
For January, FAAC allocated a total of N860.252 billion to state governments. Of this amount, N498.498 billion is designated for the states, while N361.754 billion is earmarked for local governments.
An anonymous FAAC official attributed the decision to the local governments’ inability to meet administrative requirements necessary for fund transfer.
“The January allocation did not go to the local governments but to their state accounts. If they have started submitting their accounts, their February allocations will go to them. The January allocation has been paid to the state accounts already. That means they didn’t submit their details on time. If the councils can move fast and tidy up the loose ends early, they will get their funds directly from next month. That will signal the commencement of their autonomy as desired by the Bola Tinubu administration,” the official said.
Another FAAC representative noted that the Office of the Accountant-General of the Federation (OAGF) and other stakeholders are working diligently to resolve delays in fulfilling the Supreme Court’s ruling.
“I learnt the process of creating accounts is what is holding the process, but the Federal Government is determined to make sure that local government autonomy becomes a reality. I can assure you that things are moving in the right direction,” the official commented.
To address concerns of governors potentially mismanaging local government funds, an Inter-Ministerial Committee led by the Secretary to the Government of the Federation, Senator George Akume, is creating a framework to enforce the Supreme Court’s ruling.
According to one official, the plan will authorize the Accountant-General of the Federation (AGF) to directly deduct funds meant for primary education, healthcare, and other local government responsibilities from the FAAC allocations and release them to the appropriate agencies.
“They (LGAs) have certain obligations like counterpart funding of Universal Basic Education Commission (UBEC) primary schools, health initiatives, and some other responsibilities where they are supposed to contribute a certain portion. Eventually, what will happen is that some of these funds will likely be deducted at source and transferred to those respective agencies,” the official explained.
The OAGF has been working alongside state governments to help local governments develop a template ensuring transparency and accountability in the use of their funds. However, the Akume-led committee’s progress has been hindered by the ongoing budget defense and other critical government matters.
Nevertheless, technical members of the committee continue to meet to finalize the template.
Last May, Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), initiated a case before the Supreme Court to secure full autonomy for local governments. He sought the court’s intervention to prevent governors from unlawfully dissolving democratically elected council officials and to ensure that local government funds are directly transferred to them from the Federation Account.
Although many governors contested the suit, the Supreme Court ruled on July 11, 2024, granting financial autonomy to the councils and setting a significant precedent for local governance. The ruling is aimed at curbing governors’ excessive control over local government funds and promoting transparency in financial disbursements.
To implement the ruling, the Federal Government instructed all local governments to open dedicated accounts with the Central Bank of Nigeria (CBN) to receive their monthly allocations directly, bypassing state governments.
In response to concerns over the delays in setting up the accounts, Bello Lawal Yandaki, national president of the Association of Local Governments of Nigeria (ALGON), assured stakeholders last week that the delay was due to procedural issues.
He noted,
“The CBN is presently awaiting directives from the Federal Government to open local government accounts for the respective states, which can be done within 24 to 48 hours for each.”
Yandaki added that once the accounts are fully operational and the required details are submitted, the disbursement process would proceed without further delay.
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