Financial Autonomy: Local Governments to start receiving direct allocation by January
A dedicated unit is now in place in the Office of the Accountant General of the Federation (OAGF) to handle direct disbursement of funds to the 774 local governments across the country as the planned financial autonomy for the third tier of government takes effect this month.
The first meeting of the Federation Account Allocation Committee (FAAC) for this year has been scheduled for Wednesday with operational details for direct fund allocations to the LGs expected to feature prominently, The Nation gathered yesterday.
Sources at the OAGF said the necessary structures and processes for the new dispensation were ready to ensure a seamless implementation.
“Most of the 774 LGAs will fully start receiving their allocations from January 2025.
“Our committee will reconvene later this month to review its progress and finalise measures before the Accountant-General of the Federation (AGF) issues authorisation for the complete rollout,” one of the sources said of the assignment of the Inter-Ministerial Committee set up to enforce the Supreme Court judgment on direct allocation of revenue to the councils.
The source said the Finance Minister and Coordinating Minister of the Economy Wale Edun had earlier given approval for the direct fund allocation.
The source said there should be no “challenge to carry out the approval from the Minister to start making the disbursements to the LGAs. There won’t be a challenge because it’s something they (ministry officials) do day in day out for the states.”
“A whole department is in charge of it, so it’s not going to be a challenge. The structure has been on the ground. I can confirm that,” the source added.
It was also gathered that the Inter-Ministerial Committee would also “address the actions of some governors attempting to undermine the autonomy of democratically elected LGA chairmen, deputies and councilors.”
Sources at the Federal Ministry of Justice said separately that the committee set up by President Bola Tinubu to implement the Supreme Court judgment was working round the clock to deliver on its assignment.
Most of the states are also ready for the take-off of the LG financial autonomy, having taken steps or in the process of meeting the main condition stipulated by the federal government for their councils to be eligible for the monthly allocation from the federation account: running of the LGs by democratically elected chairmen and councilors.
The apex court, in its July 11, 2024 landmark judgment, affirmed the financial autonomy of the local governments as it upheld the suit brought by the federal government to strengthen the independence of local governments in the country.
A seven-member panel of the court said in the unanimous decision that local governments should immediately receive their allocations directly from the Accountant-General of the Federation.
Justice Emmanuel Agim, who read the lead judgment, said it was illegal and unconstitutional for governors to receive and withhold funds allocated to local governments in their states.
However, the governors reached out to the federal government to allow for a gradual evolution of the new process, arguing that an unplanned financial autonomy might create more problems for the councils.
The federal government subsequently warned that revenue allocation would be denied states that failed to have democratically elected officials run the local governments.
The development prompted the states to conduct Local Government elections..
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