The Traffic

Exclusive: Local Government Autonomy Stalls as FG, CBN, and States Clash Over Direct Payments

By Achimi Muktar

Eight months after the Supreme Court ruled in favor of local government autonomy, the fight to implement direct allocation disbursements remains stalled. Despite efforts by the Accountant-General of the Federation, Oluwatoyin Madein, and the Attorney-General and Minister of Justice, Lateef Fagbemi, SAN, the process faces roadblocks, including disputes over signatories, compliance issues, and resistance from state governments.

Delta Leads the Way, Others Struggle to Catch Up

According to documents obtained by TheTrafficNG, only local governments in Delta State have submitted their bank account details for direct funding. The Federation Account Allocation Committee (FAAC) Technical Sub-Committee minutes revealed that while the Office of the Accountant-General of the Federation (OAGF) had begun receiving account details, progress has been uneven. Some LGAs provided their account details directly, while others routed them through state governments, adding to the confusion.

Madein highlighted a key challenge: identifying which local governments have democratically elected officials, a necessary step before disbursing funds. She emphasized that this foundational issue must be resolved before financial autonomy can take effect.

CBN vs. Local Governments: Who’s Blocking the Funds?

The Central Bank of Nigeria (CBN) claims it has started profiling local government chairmen and account signatories as part of its "Know Your Customer" (KYC) procedure. However, local government officials across the country argue that they have received no official directives from the CBN.

Speaking to The PUNCH, ALGON representatives in multiple states—including Abia, Oyo, Kano, Ogun, and Ekiti—denied any communication from the apex bank regarding signatory verification or account openings. Some officials accused the CBN of playing politics, insisting that no local government in their states had been contacted.

A senior local government official in Osun State confirmed that some LGAs had submitted their account details but admitted that financial operations had yet to commence.

State Governors vs. LG Autonomy: The Silent Power Struggle

The Supreme Court’s ruling was meant to end governors’ control over local government funds, yet implementation remains elusive. The National Union of Local Government Employees (NULGE) recently accused the CBN of aiding state governors in blocking direct fund disbursements.

NULGE’s National President, Hakeem Ambali, dismissed claims that LGs had failed to provide audited accounts, stating that all local governments have at least three years of financial records ready. He urged the federal government to ensure immediate implementation of financial autonomy, warning that delays could fuel corruption and mismanagement at the state level.

What’s Next? The Fight for Financial Freedom Continues

With local governments still waiting for clear directives, the battle for financial autonomy is far from over. As Delta State moves forward, other LGAs are watching closely, waiting for the Attorney-General’s final decision on the submission process.