- State governments received ₦1.46tn intended for local government councils in the first quarter of 2026, bypassing the Supreme Court’s mandate for financial autonomy.
- Nearly two years after the July 11, 2024, ruling, the direct payment system to the 774 local government areas remains stalled.
- While funds are still managed by states, council allocations saw a 19.05% increase compared to the ₦1.23tn recorded in the first quarter of 2025.
Despite a Supreme Court judgment aimed at ending state control over local government finances, state governments continue to manage the third tier’s funds.
Eko Hot Blog reports that the reports from the Federation Account Allocation Committee (FAAC) reveal that ₦1.46tn was funneled through state structures in the first three months of 2026.
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The apex court had previously ruled that states lack the constitutional authority to retain or spend funds credited to local councils, yet the old practice of using State Joint Local Government Accounts persists.
The breakdown of the ₦1.46tn allocation shows monthly fluctuations: ₦537.88bn in February, ₦456.47bn in March, and ₦468.83bn in April.
Analysts suggest that the year-on-year increase in these figures, up from ₦1.23tn in 2025, is overshadowed by the lack of direct control.
This centralized management often hinders the ability of local governments to provide essential services, such as primary healthcare, rural road maintenance, and sanitation.
The Federal Government and state governments also saw increases in their direct allocations during this period, receiving ₦2.04tn and ₦2.10tn respectively.
Conversely, 13% derivation payments to oil-producing states dropped by 18.29% to ₦321.90bn.
Civil society groups continue to call for full enforcement of the court’s ruling, arguing that genuine local government autonomy is vital for reducing corruption and improving grassroots security and economic stability.
