FG, Governors Agree to Three-Month Delay on Local Government Allocations

The Federal Government and state governors have reached a temporary agreement to delay the implementation of the financial autonomy granted to Local Governments (LGs) for three months. This moratorium, set to last until October, comes in response to concerns about the impact on salary payments and the operational viability of Local Governments.

The agreement follows a landmark Supreme Court ruling on July 11, 2024, which affirmed the financial autonomy of Nigeria’s 774 Local Governments, stating that state governors could no longer control funds meant for the councils. The court directed that Local Government allocations be paid directly into their accounts by the Accountant-General of the Federation.

This decision marks a significant shift from the previous practice under which state governors managed the funds through State and Local Government Joint Accounts. The ruling is part of a broader effort to strengthen the autonomy of Local Governments and ensure they are democratically elected and independently financed, as mandated by the constitution.

Despite the ruling, the Federal Government and state governors have agreed to delay its full implementation to address potential disruptions, particularly in terms of salary payments and the functional viability of Local Governments.

The agreement to postpone the direct payment of funds to Local Government accounts is seen as a temporary measure while stakeholders work to ensure a smooth transition. State governors, through the Nigeria Governors’ Forum, have expressed mixed reactions to the Supreme Court ruling, with some welcoming the devolution of financial responsibility, while others remain concerned about the potential implications for state finances.

As the moratorium period progresses, Local Governments will continue to operate under the current funding structure until the full implementation of the Supreme Court’s ruling in October 2024.