- The Supreme Court had ruled that it is unconstitutional for state governors to hold funds allocated for Local Government Council (LG) administration
- The ruling implies that LGs should get their allocation from the federation account directly
- Following the ruling, TheRadar outlines how much LGs should have earned in the first half of 2024
On Thursday, July 12, the Supreme Court of Nigeria ruled that the 774 Local Governments Councils (LGs) be allowed to receive and manage their funds.
In a lead judgement by Justice Emmanuel Agim, the seven-man panel unanimously said it is unconstitutional for state governors to hold funds allocated for local government administrations.
TheRadar had reported that the court ruled that since paying local governments through states has not worked, their allocation from the federation account should henceforth be paid directly to them.
Justice Agim said, “I hold that state’s retention of the local government funds is unconstitutional.
“Demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay LG allocations to the LGs directly or pay them through the states.
“In this case, since paying them through states has not worked, justice of this case demands that LG allocations from the federation account should henceforth be paid directly to the LGs.”
The court added that the funds to LGs must be paid to only democratically elected local government councils, saying, “anything other than this will be taken as a gross misconduct.”
How much have LGs received from FAAC in H1 2024?
To meet their obligations, the current revenue-sharing formula among the three tiers of government requires that the Federal Government gets 52.68 per cent of revenue, states get 26.72 per cent and LGs share 20.60 per cent of the revenue.
With the sharing of June FAAC revenue by the three tiers of government, which saw LGs receive N337.019 billion, the revenue accruable to LGs has increased to N1.746 trillion as of half year (H1 2024).
A breakdown of the FAAC disbursement between January and June 2024 shows that in January, LGs received N278.04 billion from total distributable FAAC revenue of N1.14 trillion.
In February, LGs got N267.15 billion as revenue from a total distributable FAAC revenue of N1.152 trillion, representing a N10.89 billion decrease from the amount received in January.
From total FAAC revenue of N1.123 trillion, LGs’ revenue for the month of March 2024 increased by N21.538 billion from the amount received in February to N288.688 billion.
The revenue LGs got for April 2024 increased by N5.128 from that of March to N293.816 billion out of the N1.208 trillion received as FAAC revenue.
For May 2024, Nigeria’s 774 LGAs received a total of N282 billion from a total distributable FAAC revenue of N1.1 trillion, which shows a decrease of N11.816 billion from the amount received in April.
The June 2024 FAAC revenue saw LGs’ revenue surge by N55.019 billion from the amount received in May to N337.019 billion from a total of N1.354 trillion distributable revenue.
Why is FAAC revenue not reflective of development in states? Nigerians react to N2.597trn state allocation in H1 2024
Meanwhile, TheRadar had reported that following the sharing of FAAC revenue for June, which increased allocation to states in the first half of 2024 to N2.597 trillion, Nigerians have raised concerns over the level of development in states.
According to netizens, the level of development in various states is not commensurate with the revenue received, with many calling for accountability from state governments.
