Supreme Court orders FG to pay LGCs directly from Federation account

***Bars FG from giving allocations to councils without elected officials
***20 LGCs affected

The supreme court has ordered the federal government to henceforth pay allocations directly to local government councils from the federation account.

Delivering judgment in the suit on Thursday, a seven-member panel of justices held that state governments have continued to abuse their powers by retaining and using the funds meant for LGAs.

The apex court also ordered the federal government to withhold allocations of LGs governed by unelected officials appointed by the governor.

Reca that in n May, the federal government filed a suit at the supreme court against governors of the 36 states.

In the suit marked SC/CV/343/2024, the federal government asked for full autonomy for the country’s 774 local governments.

In the suit filed by Lateef Fagbemi, attorney-general of the federation (AGF) and minister of justice, the federal government also requested the supreme court to authorise the direct transfer of funds from the federation account to local governments — in accordance with the constitution.
The suit was hinged on 27 grounds.
“That the constitution of Nigeria recognizes federal, states and local governments as three tiers of government and that the three recognized tiers of government draw funds for their operation and functioning from the federation account created by the constitution,” the originating summons had read.

“That all efforts to make the governors comply with the dictates of the 1999 Constitution in terms of putting in place a democratically elected local government system, has not yielded any result and that to continue to disburse funds from the federation account to governors for non-existing democratically elected local governments is to undermine the sanctity of the 1999 constitution.”

The federal government had asked the apex court to invoke sections 1, 4, 5, 7 and 14 of the constitution to declare that the governors and state houses of assembly are under obligation to ensure democratically elected systems at the third tier.
Flowing from the judgement, the implication us that starting from July, the Federal Government will halt the allocation of local government funds to 20 states.

The Attorney General of the Federation, Lateef Fagbemi, represented the Nigerian Government in this case.
The court’s ruling barred the Federal Government from distributing allocations to local governments led by officials who were appointed rather than elected.

Justice Emmanuel Agim, who presided over the case, directed that local government funds should no longer be paid through state governments, stating that governors have misused this process.

He pointed out that governors have been retaining and utilizing these funds improperly, which negatively affects the local government councils.

Consequently, the 20 states that lack elected local government chairmen will be barred from receiving local government funds starting in July until they hold elections.

The affected states are Jigawa, Rivers, Anambra, Imo, Kwara, Zamfara, Bauchi, Plateau, Abia, Enugu, Katsina, Kano, Sokoto, Yobe, Ondo, Osun, Delta, Akwa-Ibom, Cross River, Benue.

The 36 states and the FCT received N293.82bn from the federal government on behalf of the 774 local government areas in the country for the month of July.