In a landmark decision, the Supreme Court has declared unconstitutional the practice of state governors withholding funds meant for Local Government administrations. The apex court directed that Local Government allocations from the Federation Account be paid directly to them henceforth, effective immediately.
The court's lead judgment, read by Justice Emmanuel Agim, noted that the refusal of state governments to grant financial autonomy to local governments has persisted for over two decades. The judgment mandates the 774 local government councils to manage their funds independently, free from state government control.
The Supreme Court's decision is a significant milestone in the long-standing quest for local government autonomy in Nigeria. The Federal Government had sued the 36 state governors in May over alleged misconduct of local government funds, seeking an order to prevent arbitrary dissolution of democratically elected councils.
The lawsuit was filed on 27 grounds, and the defendants (state governors) opposed the suit. However, the Supreme Court ruled in favor of the Federal Government, declaring that the Attorney-General of the Federation (AGF) has the right to institute the suit and protect the constitution.
The judgment directs immediate compliance, stating that no state government should receive monies meant for Local Governments. This ruling is a major victory for local government autonomy, ensuring that funds meant for grassroots development will no longer be hijacked by state governments.
The current revenue allocation formula allocates 52.68% to the Federal Government, 26.72% to states, and 20.60% to Local Governments. However, the joint account system has allowed state governments to control Local Government funds, hindering the latter's ability to perform their constitutional duties. The Supreme Court's decision is a significant step towards ensuring that Local Governments receive their rightful allocations, enabling them to fulfill their mandates effectively.
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