- The Supreme Court has affirmed the local governments should be allowed to manage their funds among other rulings to be truly independent
- The court also dismissed the objection by state governments against FG’s suit seeking LG autonomy
- The judgement, hailed by Tinubu, Atiku and others, comes after a long history of battle for the independence of LGs
In a lead judgement delivered by Justice Emmanuel Agim on Thursday, July 12, the seven-man panel unanimously said it is unconstitutional for state governors to hold funds allocated for local government administrations.
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.”
While ruling on state governors' appointment of caretaker committees, the court also stated that the power of government in Nigeria is divided into three tiers: federal, state, and local, and, as such, “a democratically elected government is sacrosanct and non-negotiable.”
It held that state governors’ use of a caretaker committee means a takeover of the local government, which is a violation of the 1999 Constitution.
The Supreme Court judgement included: “A declaration that the state government has no power or control to keep the local government council money or funds.
“A declaration that the local government council is entitled to the local government allocation.
“An order of injunction restraining the defendants by themselves, agents or privies from spending local government allocation.
“A declaration that no state government should be paid any money meant for the local government.
“An immediate compliance to this judgement.”
Supreme Court quashes state governors’ objection claim
In the ruling on Thursday, the Supreme Court dismissed the counterclaim filed by the 36 state governments, which argued that the court lacked the jurisdiction to hear the matter.
In the objections filed through the states’ attorney generals, they also argued that the Attorney General of the Federation (AGF) lacked the locus standi to institute the financial autonomy suit on behalf of the local governments.
However, in the judgement delivered on Thursday, Justic Agim held that the AGF has the legal authority to initiate the suit on behalf of the LGs and uphold the constitution.
“I hold that the plaintiff’s request is hereby approved and all the reliefs granted,” Justice Agim said.
FG had dragged states to court over LGs’ autonomy
On May 26, the AGF and Minister of Justice, Lateef Fagbemi, in seeking better guarantee of the independence of local governments, had instituted a lawsuit on behalf of the Federal Government, which sought that all 774 local government councils be granted full autonomy and direct funding from the federation account as the third tier of government.
In the 27-ground suit, the AGF asked the Supreme Court to issue an order prohibiting state governors from unilateral, arbitrary and unlawful dissolution of democratically elected local government leaders.
The AGF also asked the court to make an order that will permit local government funds be directly channelled to LGs from the federation account in line with the provisions of the Constitution instead of the alleged unlawful joint accounts created by governors.
Another ground of the suit was for the court to stop state governors from further constituting caretaker committees to administer the affairs of local governments, in violation of the constitutionally recognised democratic system.
Also, the AGF had asked the Supreme Court to make an order of injunction restraining the governors, their agents and privies from receiving, spending or tampering with funds released from the federation account for local governments if there is no democratically elected local government in place.
A long, long battle
The battle for local government autonomy has been a long one owing to the overbearing influence of state governors on the administration of affairs at the local government level.
From financial control, appointment of loyalists as caretaker committees to administer local governments and arbitrary firing of elected local government executives, state governors have been calling the shots at local government administration for over two decades.
This is evident in the election pattern of local government executives in the states, where governors’ loyalists and party win in almost all local elections. This has led to calls in many quarters for local government election to be conducted by the Independent Electoral Commission (INEC).
In seeking financial autonomy for LGs, former President Muhammadu Buhari, in December 2022, had accused governors of stealing local government funds.
President Buhari then proceeded to enforce the constitutional provisions that stipulate that local governments were entitled to receive their funds directly from the federation account.
Buhari sought the abolishment of the joint accounts into which the various state governors diverted local government funds of their various states.
In enforcing this, the Nigerian Financial Intelligence Unit (NFIU) had limited cash withdrawals from local government accounts to a maximum of N500,000 daily and warned banks to ensure strict compliance.
However, the 36 state governments opposed the move by NFIU, arguing that the NFIU’s action was illegal under a federal system of government, noting that the NFIU, being a federal government agency, lacked the power to decide how states should spend their money.
The governors’ suit was filed by Lateef Fagbemi, who was then a private lawyer and the AGF now.
Still pushing for the independence of the local governments, the senate, in December 2023, asked the Federal Government to stop the allocation of funds to local governments headed by caretaker committees.
Tinubu, Atiku hail Supreme Court judgement
President Bola Tinubu and the presidential candidate of the Peoples Democratic Party (PDP) in the 2023 general election, Atiku Abubakar, have hailed the Supreme Court judgement granting autonomy to local governments.
President Tinubu, in a statement by his Special Adviser on Media and Publicity, Ajuri Ngelale, said the judgement is an affirmation of the constitutional rights of the local government and its role in advancing governance at the grassroots.
He said the judegment will ensure the effective and transparent management of local government resources by officials elected by the people at that level.
“The ‘Renewed Hope’ agenda is about the people of this country, at all levels, irrespective of faith, tribe, gender, political affiliation, or any other artificial line they say exists between us.
“This country belongs to all of us. By virtue of this judgment, our people – especially the poor – will be able to hold their local leaders to account for their actions and inactions. What is sent to local government accounts will be known, and services must now be provided without excuses,” Tinubu said.
On his part, Atiku, via his X handle, said the ruling is a “win for the people of Nigeria,” adding that the judgement should also be extended beyond federation allocation to management of internally generated revenues from local government areas.
Atiku said, “I also share the belief that fiscal autonomy to the local governments should not be limited to revenues from the federation accounts, but indeed, should apply to Internally Generated Revenue from the respective local government authorities.
“Many of our states, especially those in the ultra-urban areas with high-density economic activities, have become notorious in muscling local councils from generating revenue on items that border on motor parks, outdoor advertising, rents and many more.”
News on the Go: 5 things that should matter to you today
In a previous report, TheRadar compiled the top issues in the news that would matter to an average Nigerian.
Some of the issues include: Federal Government offers free CNG conversion for commercial vehicles, Kenya’s Ruto sacks ministers after deadly protests and NBS survey shows that Nigerians paid N721bn cash bribes to govt officials.
