Financial autonomy: FG moves to implement supreme court verdict amidst delays

DDM News

The Accountant-General of the Federation, Oluwatoyin Madein, and the Attorney-General and Minister of Justice, Lateef Fagbemi, SAN, have begun discussions on enforcing the Supreme Court’s July 11, 2024, ruling on local government autonomy.

However, direct allocation disbursement to the 774 local government areas remains delayed.

Diaspora digital media (DDM) gathered that the two senior officials are consulting on the process of submitting LGAs’ bank accounts for direct payment of allocations.

They are reportedly facing challenges in identifying LGAs with democratically elected officials.

This information was contained in the minutes of the Federation Account Allocation Committee (FAAC) Technical Sub-Committee meeting obtained by The PUNCH on Sunday.

According to an insider, the minutes indicate that only Delta State’s local government areas have submitted their account details to the Office of the Accountant-General of the Federation (OAGF).

The submission was confirmed during the FAAC Technical Sub-Committee meeting held on January 17, 2025, at the Federal Ministry of Finance Headquarters, Abuja.

The document revealed that while the OAGF had started receiving account details from various sources, only Delta State LGAs had fully complied.

Some local governments submitted account details directly, while others did so through their state governments.

Despite this progress, discussions on submission modalities are ongoing, with consultations with the AGF still incomplete.

The Accountant-General stated that the office had received account details from various sources, some directly and others through the states.

She confirmed that so far, only Delta State LGAs had provided their details.

However, she added that consultations with the AGF regarding submission modalities were still in progress.

The minutes highlighted legal concerns regarding the submission process, particularly in relation to constitutional provisions.

At the meeting, which was chaired by the Accountant-General, participants noted that identifying LGAs with properly elected leadership posed a major challenge.

Madein reportedly pointed out that this foundational issue remains unresolved.

For LGAs with duly elected leaders, the question of how to ensure they receive direct allocations must be addressed.

She explained that several complexities must be resolved before the system can function effectively.

The minutes further revealed that the OAGF would seek clarification from the AGF to assess the situation and determine the next steps.

The Accountant-General of Niger State, referred to as “AG Niger” in the document, suggested that once the AGF provides guidelines, a formal letter should be sent to the OAGF detailing the required steps for LGAs to submit their accounts.

The representative stressed that without clear instructions, implementation could vary across states, leading to inconsistencies in local government financial autonomy.

The chairman of the meeting directed the Director of the Federation Account to take note of concerns regarding communication with the AGF’s office.

The minutes stated that a system for implementation was being developed, but the initial challenge was identifying LGAs with constitutionally elected chairmen.

Additionally, for LGAs with properly elected leadership, there was a need to determine the mechanisms for ensuring they receive direct allocations.

The chairman noted that numerous complexities must be addressed before full implementation.

She added that the OAGF would seek guidance from the AGF to assess the current status and determine the way forward for the month.

She further directed the Director of the Federation Account to document concerns regarding communication with the AGF’s office.

With Delta State LGAs leading the submission of account details, other states are expected to follow once clear directives from the AGF are issued.

One of the newly elected local government chairmen in Ondo State, speaking on condition of anonymity, disclosed that LGAs’ bank accounts would be submitted after the Joint Allocation Committee (JAC) meeting on Monday.

He stated that they would submit the accounts to the Central Bank of Nigeria (CBN) the following day after the JAC meeting.

Earlier, The PUNCH reported that the CBN had begun profiling the chairmen and signatories of the 774 LGAs’ bank accounts as part of the process of implementing local government autonomy.

CBN’s Director of Legal Services, Kofo Salam-Alada, explained that the profiling was necessary to ensure financial accountability.

However, the Association of Local Governments of Nigeria (ALGON) claimed it had received no communication from the apex bank regarding the opening of bank accounts.

Providing insight into the delay in fund disbursement, the CBN legal director stated that the apex bank had no direct banking relationship with LGAs.

Salam-Alada clarified that the profiling process was part of the standard Know Your Customer (KYC) procedure.

He emphasized that all signatories must be properly verified.

He assured that once documentation was completed, the accounts would become operational within 48 hours.

He urged ALGON to encourage its members to engage with the CBN at the local level.

However, ALGON’s representative at the event, Sam Akala, disputed the CBN’s claim, stating that he was unaware of any official communication regarding the account opening process.

An insider confirmed that the CBN had engaged with ALGON members on the matter.

The insider stated that while guidelines were being drafted, the framework had yet to be finalized.

Once completed, the guidelines would facilitate the opening of dedicated accounts for local government financial autonomy.

LGAs Challenge CBN

Meanwhile, local government chairmen have accused the CBN of insincerity over its claim that it was verifying signatories to LGAs’ bank accounts before implementing the Supreme Court judgment.

The councils argued that they had not received any directive from the apex bank to open dedicated bank accounts for monthly federal allocations.

Reacting to the CBN’s assertion, ALGON representatives across various states insisted they had received no communication regarding account openings.

ALGON Chairman in Abia State and Mayor of Isuikwuato LGA, Chinesu Ekeke, denied receiving any invitation for signatory verification.

He stated that neither he nor ALGON headquarters had been informed.

Similarly, an ALGON executive member in Oyo State disclosed that no council chairman had received an invitation from the CBN, either through the state Ministry of Local Governments or individually.

An ALGON official in Ibadan accused the CBN of politicizing the issue.

He claimed that the bank had not invited any local government chairman in the state for verification.

Council chairmen in Benue State also stated that there was no official communication from the Federal Government, state government, or ALGON regarding verification.

A Benue council chairman noted that there was no memo or directive to any LGA chairmen across the 774 local governments to open dedicated accounts with the CBN.

In Imo State, Mbaitoli LGA Chairman Ifunanya Nwanegwo also said he had not been contacted for verification.

Similarly, Garko LGA Chairman in Kano State, Saminu Garko, confirmed that no council had opened an account with the CBN.

He stated that the CBN had not invited any local government chairmen in Kano for verification.

Ekiti East LGA Chairman and ALGON Chairman in Ekiti State, Oluwasegun Ojo, also denied any verification.

He emphasized that LG officials were waiting to see how the Federal Government and state governments would resolve the issue.

Council chairmen in Ogun State also denied being contacted by the CBN regarding signatory verification.

A senior official in a local government in Osun State confirmed that account details had been submitted but declined to give further details.

A top official in Ado Local Government, Ekiti State, revealed that LGs in the state had yet to submit accounts for autonomy implementation.

ALGON Chairman in Kwara State, Abubakar Abdullahi, stated that no directive had been received regarding account submission to the CBN.

Similarly, the Information Officer of Bauchi LGA, Babangida Jahun, was unsure if accounts had been submitted.

The Chairman of Jos North LGA, Plateau State, also stated that he had not received instructions to submit account details.

The Supreme Court’s ruling on July 11, 2024, affirmed financial autonomy for the 774 LGAs and prohibited governors from controlling their funds.

The court directed the Accountant-General of the Federation to pay local government allocations directly into their accounts.

However, eight months after the judgment, financial autonomy has yet to take effect.

The National Union of Local Government Employees (NULGE) warned the CBN against aiding governors in undermining council financial autonomy.

NULGE National President, Hakeem Ambali, dismissed claims that LGs failed to provide two years of audited accounts.

He asserted that all councils had at least three years of audited financial records and were ready to present them to ensure autonomy implementation.

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