In a landmark ruling on Thursday, the Supreme Court declared that it is unconstitutional for state governors to withhold funds intended for Local Government (LG) administrations.
PLATFORM TIMES reports that the ruling is expected to bring significant changes to the financial autonomy and operational efficiency of the 774 local government councils in Nigeria.
Delivering the lead judgement, Justice Emmanuel Agim emphasised that the refusal of state governments to grant financial independence to local governments has persisted for over two decades.
He pointed out that local governments have been deprived of their rightful funds by state governors acting on their behalf, which has severely hindered their functionality and effectiveness.
“The local governments should manage their funds themselves,” Justice Agim stated, dismissing the preliminary objections raised by the state governors.
PLATFORM TIMES further said that the ruling directly addresses the longstanding issue where local governments have stopped receiving funds meant for them, impacting their ability to govern effectively.
The judgement comes amid increasing calls for local government autonomy in Nigeria.
President Bola Tinubu has been a vocal supporter of these calls.
In May, the Federal Government, represented by Attorney-General of the Federation (AGF) Lateef Fagbemi, sued the 36 state governors over alleged mismanagement of local government funds.
This lawsuit was based on 27 grounds, including the arbitrary dissolution of democratically elected councils by state governors.
The current revenue allocation structure in Nigeria sees the Federal Government receiving 52.68%, states 26.72%, and local governments 20.60% of the monthly revenue.
However, the funds allocated to local governments are paid into a joint account operated by state and local governments, which has allowed state governors to exert control over these funds.
Justice Agim upheld the AGF’s right to institute the lawsuit to protect the constitution, highlighting that the state governors’ retention of local government funds has truncated the activities of the local councils.
The Supreme Court’s directive mandates that henceforth, local government allocations from the Federation Account be paid directly to them, bypassing state government coffers.
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