Senate Demands FAAC Restructuring, Seeks Inclusion of Local Government Representatives

• Senate Demands FAAC Restructuring.
• 1981 law excludes LGCs despite constitutional and court backing
• Supreme Court ruled LGC funds must bypass states, go directly

The Nigerian Senate has urged the Federal Government to amend the current structure of the Federation Account Allocation Committee (FAAC) to include representatives from all 774 Local Government Councils and Area Councils across Nigeria’s 36 states and the Federal Capital Territory.

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EKO HOT BLOG reports that this call was made following concerns that the existing FAAC framework, as defined in Section 5 of the Allocation of Revenue (Federation Account, etc.) Act of 1981, restricts membership to only federal and state government representatives—excluding local governments, which constitutionally form the third tier of government.

Rising under a motion titled “Urgent Need to Alter the Composition of the Federation Account Allocations Committee (FAAC) by Including Representatives of Local Governments and Area Councils,” Senator Isah Jibrin (APC, Kogi East) presented the motion on behalf of Deputy Senate President, Jibrin Barau (APC, Kano North), during Tuesday’s plenary.

Jibrin stressed that under Section 7(1) of the 1999 Constitution, Local Government Councils are recognised as the third tier of the federation and are therefore entitled, under Section 162(3), to directly share in allocations from the Federation Account.

He further referenced a July 2024 Supreme Court ruling that affirmed the constitutional illegality of routing local government funds through state governments. The court held that states are mere agents responsible for transferring funds to LGCs without any claim or control over the allocations. The judgment emphasised the need for direct payments to LGCs to ensure transparency and proper fiscal autonomy.

“The Supreme Court has recognised that paying LGCs through the states has not worked. Justice demands that allocations be made directly,” Jibrin said.

He criticised the outdated nature of the 1981 revenue law, noting that its exclusion of LGCs from FAAC is inconsistent with recent constitutional interpretations.

The Senate’s resolution includes notifying the Minister of Finance and Coordinating Minister of the Economy, Wale Edun—who chairs FAAC—of the need to address the committee’s current composition. The Senate also announced plans to collaborate with the House of Representatives to ensure a unified legislative stance.

Senate Demands FAAC Restructuring

Jibrin concluded by stating that although state governments have historically represented local councils at FAAC meetings, the Supreme Court’s recent decision necessitates an immediate reform. He proposed that each state and area council nominate one representative to sit on FAAC, ensuring that local governments have a direct voice in the allocation process.

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