Autonomy: Governors Push Back Against Direct LGA Allocation, Seek Delay

• Governors seek delay in implementing LGA autonomy over financial concerns.
• Governors reject CBN direct allocation, urging payment via commercial banks.
• Supreme Court ruling mandates that LGAs receive funds directly, bypassing state control.

State governors have renewed their push against the planned disbursement of federal allocations directly to local government councils (LGAs), aiming to delay the implementation of the Supreme Court ruling on LGA autonomy.

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EKO HOT BLOG reports that at a recent meeting with President Bola Tinubu in the State House, Abuja, the governors expressed concerns over the federal allocation being paid through the Central Bank of Nigeria (CBN). They cited the need to address the multi-billion-dollar debts allegedly incurred by the councils, which they feared would worsen the financial situation of local governments.

Presidency sources revealed that the governors took the opportunity during the Iftar dinner on Tuesday to lobby the President, seeking a delay in the direct allocation process. They argued that if the funds were sent through the CBN, it would still be perceived as the Federal Government controlling the disbursement.

A source familiar with the discussions said, “The Federal Government wants the allocations paid to the CBN, with each local government opening an account there. But the governors rejected this proposal. They argued that this would still mean the Federal Government retains control over the funds.”

The governors instead pushed for the allocations to be paid to commercial bank accounts, fearing that the CBN’s involvement would require approval from the Accountant-General, which they believed would still place the funds under federal control.

As of now, the direct payment system for LGAs remains unresolved. Despite the Supreme Court’s landmark ruling on July 11, 2024, affirming fiscal autonomy for local governments, the process has faced significant delays. The ruling mandated that federal allocations be paid directly to LGA accounts, bypassing state governments.

The Supreme Court’s decision was aimed at curbing the practice of state governors appointing caretaker committees to manage LGAs, as such officials were deemed unconstitutional. It also required that only democratically elected LGA officials could access and manage these funds.

In response to the ruling, the CBN began profiling local government chairmen and initiating the opening of bank accounts for direct payment of allocations. However, the process has faced delays due to concerns over financial accountability and a lack of clear guidelines for local government chairmen to engage with the CBN.

A source from the Association of Local Governments of Nigeria (ALGON) highlighted the delays, noting that the governors were pushing for a postponement of the implementation due to outstanding debts incurred on behalf of the councils.

Meanwhile, a report from Mohammed Abubakar, ALGON’s Secretary-General, revealed that governors were pressuring the CBN to delay the process to avoid the local government funds being used to settle these debts. He cautioned against mismanagement of the funds, urging stakeholders to engage in consultations to ensure proper handling of LGA allocations.

In a bid to address these concerns, President Tinubu has called for collaboration from the state governors to ensure the effective implementation of local government autonomy without causing harm to the relationship between the states and councils.

Abubakar further stressed that clarity was needed from the CBN regarding the procedures for LGAs to receive their funds directly. He urged that the Attorney-General’s office and the relevant government agencies hold broader consultations with stakeholders to facilitate a smooth and transparent implementation process.

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