The Federal Government and state governors have decided to postpone the implementation of financial autonomy for Local Governments until October, amid concerns over salary payments and the operational stability of these councils.
The delay follows a July meeting of the Federation Allocation Account Committee (FAAC), where the Local Governments’ share of N337.019 billion was not directly paid into their accounts, as mandated by the Supreme Court.
The Supreme Court had previously ruled that Local Government funds should be paid directly to their accounts rather than through state governments.
The Association of Local Governments of Nigeria (ALGON) has expressed frustration, accusing state finance commissioners of collaborating with governors to obstruct the direct payment of funds.
ALGON has threatened legal action if compliance with the Supreme Court’s ruling is not achieved.
The Federal Government has acknowledged that the direct payment process has not yet commenced.
Minister of Finance, Wale Edun, attributed the delay to “practical impediments” and stated that a committee is reviewing the ruling to determine a feasible implementation strategy.
Governor Seyi Makinde of Oyo State has expressed concerns about the judgment, advocating for a locally developed solution to ensure transparency and protect public welfare.
“When two elephants are fighting, it is the grass that will suffer,” Makinde remarked, emphasizing the need for a balanced approach.
Sources close to the Nigeria Governors’ Forum and the Federal Government reveal that a political solution is being sought to manage the implications of the Supreme Court’s decision.
A three-month moratorium on the judgment has been agreed upon, during which LG allocations will continue to be paid into the joint state accounts while a permanent solution is developed.
Governors are reportedly relieved that the judgment may ease their financial burden but are wary of potential challenges reminiscent of the early 1990s, when local government staff faced extended salary arrears.
Mrs. Anestina Iweh, Chairperson of the National Union of Local Government Employees in Akwa Ibom State, confirmed that the July allocations were distributed to state finance commissioners.
She criticized the Federal Government for failing to update the account details of the 774 LGAs, highlighting the urgent need for salary payments.
The Supreme Court’s July 11, 2024, ruling directed that Local Government funds be paid directly into their accounts, countering previous practices where governors controlled these funds.
This move follows earlier efforts under former President Muhammadu Buhari to safeguard Local Government funds, which faced resistance from the Nigerian Governors’ Forum.
