…moves to abolish States’ joint accounts with LGs
Nigeria’s National Assembly is pushing a major constitutional reform to give the Supreme Court’s landmark ruling granting financial autonomy to Local Governments due legal backing.
The Supreme Court in May 2024 ordered that federal allocations be paid directly to the 774 Local Government Areas (LGAs) across the Country, but the ruling has yet to be fully implemented, largely due to entrenched Constitutional and Administrative bottlenecks.
Section 162 of the 1999 Constitution (as amended), which recognises LG autonomy, however, does not explicitly require direct payment from the Federation Accounts to Local Governments. Instead, it legally supports the joint account system, giving States control over how funds are distributed to LGAs.
I62 (5) provides that each state shall maintain a “State Joint Local Government Account” into which shall be paid all allocations to the Local Government Councils of the State from the Federation Account and from the Government of the State.
This legal framework has allowed State Governors to dominate Local Government finances, often withholding or mismanaging funds meant for grassroots development.
To address this, the National Assembly wants to, among others, abolish the State Joint Local Government Account, one of the root problems that has since crippled Local Government Councils’ financial dependence on State Governments.
At the Federal House of Representatives, there are currently 14 proposed bills seeking to enhance the autonomy of the Local Governments by providing a structured system of Executive and Legislative arms of the Local Governments, as well as an independent electoral body for conducting elections to Local Government Offices, and full financial and administrative autonomy for Local Government councils.
One of such bills is entitled ”A Bill for an Act to Alter the Constitution of the Federal Republic of Nigeria, 1999 to Review the Framework for Local Government Administration, Establish a Robust Legal Regime to Strengthen Administrative Efficiency, Promote Transparency, Accountability, and Deepen Democratic Practices at the Local Government Level and for Related Matters sponsored by Benjamin Kalu, the Deputy Speaker.
This bill seeks to amend Section 7 of the Constitution, ensuring that Local Governments are democratically elected and not governed by Caretaker Committees. The apex court had held that only democratically constituted LGs should receive allocations.
The Bill also proposes to abolish the State Joint Local Government Accounts. It proposes creating a special account where all funds allocated to Local Government Councils directly from both the Federation Account and the State Government will be deposited.
Lawmakers also want to alter on alter the provisions of Section 127 of the Constitution to establish a separate office of Auditor General of State, different from the one established by Section 125, in a bid to institutionalise a mechanism for fiscal accountability at the grassroots level.
This Auditor General shall be saddled strictly with the duty to audit the accounts of all the Local Governments in the particular State, while the Auditor General under Section 125 will audit the accounts of the State Government.
Lawmakers also want to alter the provisions of section 7 of the Constitution to review the means of election into the offices of the Chairmen and Vice-Chairmen of the Local Government Councils in Nigeria. The bill introduces a new sub-section 7A to 7C proposes that the Local Government leadership be nominated and voted into office by the members of its Legislative Council.
Furthermore, Lawmakers want to alter section 153 and the 3rd schedule of the Constitution to establish the National Local Government Electoral Commission as an independent body responsible for organising, conducting, and supervising elections into the offices of Chairmen and Councillors of all the Local Governments across the Federation, including the Area Councils of the Federal Capital Territory.
The Commission shall ensure the credibility, transparency, and fairness of local government elections and promote democratic governance at the grassroots level.
Meanwhile, several experts have thrown their support behind the ongoing amendment at the National Assembly, stressing that LG autonomy is key for true federalism.
Paul Alajeh, an economist, said LGs must be granted fiscal and administrative autonomy, noting the current system had not worked in driving development.
“If we want real development, if we want rural areas to feel governance, benefit from the dividends of the federal government, then give LG fiscal autonomy”, he said.
Samuel Nzekwe, a Financial Expert, also argued that LG autonomy would drive development.
“It is good to have LG Autonomy because development comes from the grassroots. It brings the Government closer to the people. They shouldn’t be at the whims and caprices of Governors, which have not worked well for local development”, he noted.
Majeed Dahiru, a Political analyst, argued that the lack of LG Autonomy had been more of a political problem than legal. According to him, LG autonomy is already embedded in the constitution, but the political leaders have rather devised a means to deny the constitutionally recognised third tier of Government.
“We should put on trial the Governors who stifled local government autonomy. It is a form of corruption that should not go unpunished. States ought to have agreed on how to share funds with LG”, he said.
Chinedu Obi, Political Analyst and Director-General of the Inter-Party Advisory Council (IPAC) believes that if LGs receive funds and utilise same effectively, the level of poverty, unemployment, hunger, insecurity in the Country will reduce.
“Fiscal independence or fiscal autonomy is the best solution that will help real development in the grassroots. People should be allowed to elect who they feel they can hold accountable, and who can answer to their needs, and provide it for them. I vote for fiscal autonomy for the local government”, he noted.
