The Supreme Court of Nigeria has ruled that the country’s 774 local government areas (LGAs) must be granted full financial autonomy, ensuring direct allocation of funds from the Federation Account.
This landmark decision, delivered on July 11, 2024, by a seven-man panel led by Justice Garba Lawal, aims to empower LGAs as independent entities within the federation.
The ruling emerged from a suit filed by the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), who argued for direct funding to LGAs managed by elected officials, not caretaker committees appointed by governors.
The 36 state governors, represented by their attorneys general, opposed the suit, claiming the Supreme Court lacked jurisdiction. However, the Court dismissed their objections and mandated immediate compliance with the judgment.
Justice Emmanuel Agim, delivering the ruling, criticized the longstanding practice of state governments withholding funds meant for LGAs, which hampers their operations and development. He emphasized that only democratically elected local government administrations are entitled to these funds.
The Supreme Court’s decision comes amid growing demands for local government autonomy in Nigeria, supported by President Bola Tinubu. The Federal Government, in May, took legal action against state governors for alleged misappropriation of local government funds.
Currently, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) allocates 52.68% of Nigeria’s monthly revenue to the Federal Government, 26.72% to states, and 20.60% to local governments. However, these funds are often managed by state governments, leading to ineffective local administration.
With this ruling, funds for LGAs will be directly allocated to them, bypassing state government control. This aims to enhance the efficiency and independence of local governments, fostering better governance and development at the grassroots level.
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