In a historic ruling on Thursday, the Supreme Court declared that all federal funds intended for local government councils must be paid directly into their accounts, effectively granting financial autonomy to Nigeria’s 774 local councils.
Justice Emmanuel Agim, leading a seven-member panel of justices, delivered the judgment in a suit filed by the federal government against the 36 state governors.
The ruling emphasized that no more payments of local government area allocations would be made to state government accounts.
The court issued three major orders to the state governors:
Direct Payment Order: Allocations from the Federation Account to local governments must be paid directly into their accounts.
Prohibition on Interference: Governors are prohibited from receiving, tampering with, or withholding funds meant for local governments.
Ban on Dissolution of Councils: Governors are barred from dissolving democratically elected officials of local governments, as such actions violate the 1999 Constitution.
The Federal Government, represented by Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), approached the Supreme Court to compel the governors to grant full autonomy to local governments.
The suit, marked SC/CV/343/2024, accused the state governors of gross misconduct and abuse of power.
In the originating summons, the Federal Government argued that funds credited to local governments from the Federation Account should be paid directly to the local governments, bypassing the state governments.
Additionally, the justice minister requested an order restraining governors and their agents from interfering with these funds, particularly in states without democratically elected local government systems.
The Federal Government also sought an order to stop governors from appointing caretaker committees to manage local governments, a practice contrary to the constitutionally guaranteed democratic system.
Justice Agim noted, “The refusal of state governments to grant financial autonomy to local governments has gone on for over two decades,” stressing the need for local governments to manage their funds independently.
This ruling marks a significant step toward strengthening local governance in Nigeria, ensuring that local councils receive the necessary funds to operate effectively and serve their communities.
The Supreme Court’s decision is expected to bring about transformative changes in the administration and development of local government areas across the country.
