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Supreme Court Declares Withholding of LG F
Supreme Court Declares Withholding of LG Funds by State Governors Unconstitutional
On Thursday, the Supreme Court delivered a landmark ruling declaring that it is unconstitutional for state governors to withhold funds designated for Local Government (LG) administrations.
In the lead judgment, Justice Emmanuel Agim highlighted that the denial of financial autonomy to local governments by state governments has persisted for over two decades. He emphasized that local governments have been deprived of their rightful funds by state governors acting on their behalf. Justice Agim asserted that the 774 local government councils in the country should manage their finances independently.
The Struggle for LG Autonomy
Nigeria’s 774 local government areas have long faced inefficiency due to the overbearing control of state governors, who have been accused of mismanaging funds intended for local government administration. In recent months, the call for local government autonomy has intensified. President Bola Tinubu has voiced his support, and in May, the Federal Government, through the Attorney-General of the Federation (AGF), Lateef Fagbemi, sued the 36 state governors for alleged misconduct concerning local government funds.
Currently, the Federal Government receives 52.68% of the country’s monthly revenue, states receive 26.72%, and local governments receive 20.60%. These funds, allocated by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and disbursed by the Federation Account Allocation Committee (FAAC), are paid into a joint account managed by state governments and local governments.
The AGF’s suit sought an order to prevent governors from arbitrarily dissolving democratically elected councils. The suit, based on 27 grounds, was met with opposition from the 36 state governors.
The Verdict
Justice Agim ruled that the AGF has the authority to file the suit and uphold the constitution. Consequently, the Supreme Court directed that Local Government allocations from the Federation Account should be paid directly to the local governments and not through state government coffers.
Justice Agim stressed that the retention of funds by state governors disrupts the activities of local governments. He ordered the immediate implementation of the judgment, stating that no state government should receive funds meant for Local Governments.
This ruling marks a significant step towards ensuring financial independence for local governments and enhancing their efficiency in serving their communities.
