In a fresh move to delay the implementation of the Supreme Court’s verdict on Local Government Autonomy, state governors are lobbying President Bola Tinubu to block the direct payment of federal allocations to local government areas (LGAs).
The governors argue that the payment system, which would bypass state governments and be handled by the Central Bank of Nigeria (CBN), could worsen the financial crisis in their states.
During a recent meeting at the State House, the governors expressed concerns over multi-billion dollar debts allegedly incurred in the name of the LGAs.
They contended that using the CBN to process these allocations would effectively maintain federal control over local government funds.
An official familiar with the discussions revealed, “They said the meeting was positive, but I don’t know what they agreed upon. The main issue is that the local government allocation is still being withheld.”
The Supreme Court’s judgment, delivered in July 2024, affirmed the fiscal autonomy of local governments, mandating that federal allocations should be paid directly to LGAs.
However, this has been met with resistance from the governors, who fear the loss of control over local government funds. “If the money goes to the CBN, it’s as good as the Federal Government still controlling everything,” one governor noted.
The CBN has already begun profiling LGAs and their chairmen to facilitate direct payments but is encountering logistical challenges. Despite this, the governors are pushing for further delays, citing debts and the risk of mismanagement of local government funds.
Mohammed Abubakar, Secretary-General of the Association of Local Governments of Nigeria (ALGON), urged for clearer guidelines from the CBN to avoid potential misuse of funds.
He stated, “Local government funds may end up being diverted to settle debts that councils are not even aware of.”
This ongoing standoff between the state governors and the federal government has left many questioning whether local government autonomy will ever be fully implemented.
For now, the future of direct payments to local governments remains uncertain as negotiations continue.