Nigeria is taking a bold step toward grassroots development with the implementation of financial autonomy for its 774 local governments.
The Office of the Accountant General of the Federation (OAGF) has established a dedicated unit to oversee the direct disbursement of funds to local councils, marking the beginning of a transformative era for the third tier of government. The policy, designed to enhance local governance and accountability, takes effect this month.
As part of the rollout, the Federation Account Allocation Committee (FAAC) is set to hold its first meeting of the year on Wednesday, where operational details for the direct allocation of funds to local governments will be discussed.
Sources within the OAGF have confirmed that all necessary structures and processes are in place to ensure a smooth transition.
The Inter-Ministerial Committee, chaired by Secretary to the Government of the Federation (SGF) Chief George Akume, is working to finalize measures for full implementation, building on the Supreme Court’s judgment mandating direct allocations to local councils.
Finance Minister and Coordinating Minister of the Economy Wale Edun has already approved the new framework, signaling the federal government’s commitment to the reform.
Insiders at the Finance Ministry are confident that the transition will be seamless, given the ministry’s routine experience in handling similar allocations for states.
The Supreme Court’s landmark ruling, delivered on July 11, 2024, declared the practice of state governors withholding local government funds unconstitutional.
Justice Emmanuel Agim, in delivering the lead judgment, emphasized that local governments must receive their allocations directly from the federation account to ensure transparency and efficiency in managing their resources.
Most states have begun aligning with the federal government’s directives, with many conducting local council elections to meet eligibility requirements for the monthly allocations. Adamawa State, for instance, has long operated autonomous local councils.
Commissioner for Information and Strategy James Iliya affirmed the state’s readiness for the policy, noting that Adamawa’s councils have enjoyed independence well before the federal mandate.
Delta State has also demonstrated its commitment to local government autonomy. Finance Commissioner Fidelis Tilije highlighted the state’s longstanding tradition of fiscal independence for councils, citing substantial financial support provided over the years.
In Plateau State, Local Government and Chieftaincy Affairs Commissioner Ephraim Usman assured that the government has consistently respected local councils' financial independence, a sentiment echoed by officials in Ebonyi, Abia, and Ogun States.
While the policy has garnered widespread support, some governors have raised concerns about potential challenges in implementing full autonomy.
The federal government has, however, warned that states failing to meet the required conditions, such as conducting local elections, risk losing their revenue allocations.
To address these issues, the Inter-Ministerial Committee has been tasked with curbing attempts by governors to undermine the autonomy of democratically elected council officials.
This reform signals a new chapter for grassroots governance in Nigeria, with the potential to transform local councils into hubs of development and innovation.
By granting financial independence to local governments, the federal government aims to foster transparency, accountability, and more efficient service delivery across the nation.
As the policy takes effect, Nigerians look forward to a brighter future where local councils play a pivotal role in driving sustainable development.