Starting in January 2025, local governments in Nigeria will get their direct allocations from the Federation Account. This change comes after the Supreme Court’s decision on July 11, 2024, which gave local councils financial independence. This marks a significant shift in the nation’s governance structure, because it stops the old system where states and local governments shared an account to send funds to councils.
The decision, which will take effect with this month’s payment from the Federation Accounts Allocation Committee (FAAC), is meant to make sure that local governments have timely and direct access to their funds, without any involvement or delays from state governments.
A member of the Inter-Ministerial Committee, which is responsible for carrying out the decision, confirmed the news. They said, “Some local government areas have already begun getting their funds directly. By January 2025, all 774 local government areas will receive their funds directly without any issues.” The committee plans to meet again in January to check how things are going and complete the steps needed for the full implementation.
The Supreme Court’s judgment has faced resistance from several state governors who have expressed dissatisfaction with the ruling. Concerns remain over potential state interference in local government operations. For instance, in Edo State, the House of Assembly recently suspended elected local government leaders, accusing them of not following the orders of Governor Monday Okpebholo.
In Anambra State, the House of Assembly recently approved a Local Government Administration Bill that says councils must put some of their funds into a joint account managed by the state. This decision has led to concerns about whether it follows the Supreme Court’s ruling and has caused worries that states might still interfere in local government matters.
President Bola Ahmed Tinubu has been a strong supporter of giving local governments financial independence. He emphasizes the need to follow the constitution, which sees local councils as a separate level of government. Tinubu believes this is essential for making governance at the local level stronger and for improving services to the people.
