FG Explains Delay in Direct Fund Releases to LGAs Despite Supreme Court Ruling

The Federal Government has clarified why the Central Bank of Nigeria (CBN) has yet to commence direct fund allocations to Nigeria’s 774 Local Government Areas (LGAs), despite a Supreme Court order granting them fiscal autonomy. Speaking at a Nigerian Bar Association (NBA) discourse on Wednesday, Attorney-General of the Federation (AGF) Lateef Fagbemi, SAN, and CBN’s Director of Legal, Kofo Salam-Alade, attributed the delay to incomplete modalities for implementation.

Fagbemi, represented by Tijjani Gazali, SAN, revealed that an implementation committee—comprising representatives from the Federal Government, the Association of Local Governments of Nigeria (ALGON), and the Nigerian Governors Forum—was established following the Supreme Court’s July 11, 2024, ruling. The committee is tasked with creating a practical framework for direct payments from the Federation Account to LGAs. “The committee is expected to complete its mandate any time from now,” Fagbemi stated, emphasizing President Bola Tinubu’s commitment to liberating LGAs as a bona fide third tier of government—a resolve that prompted the FG’s legal action against the 36 state governors.

However, Fagbemi expressed dismay at some governors’ continued defiance of the ruling, illegally dissolving elected LGA councils. Calling such actions “tantamount to treason,” he warned of severe consequences for offending states, despite governors’ immunity under Section 308 of the Constitution. “This flagrant disobedience to the Supreme Court judgment will have unpleasant consequences for the state as a whole, should it persist,” he cautioned.

CBN’s Salam-Alade provided further insight, explaining that the apex bank lacks existing banking relationships with LGAs, necessitating a profiling process for account signatories to ensure transparency. “This is all about the standard procedure in the form of KYC (Know Your Customer),” he said, noting ongoing collaboration with the AGF’s office. He urged ALGON to mobilize LGAs to approach CBN branches for documentation, promising resolution within 48 hours. Contrarily, ALGON’s Sam Akala disputed the CBN’s claim of outreach, stating no official communication had been received, though he affirmed ALGON’s readiness to support grassroots development.

NBA President Mazi Afam Osigwe, SAN, underscored the discourse’s goal of ensuring functional LGAs, warning, “If we fail to get it right at the LG level, we may be setting a stage for a greater calamity.” As modalities take shape, the delay highlights logistical hurdles, while governors’ resistance tests the ruling’s enforcement, leaving LGA autonomy in limbo.