Council autonomy: ALGON, NULGE kick as govs get N2tn LG allocations

The Federation Accounts Allocation Committee disbursed a total of N2.08tn in allocations to Local Government Councils between July and December 2024, findings by The PUNCH have shown.

However, despite the July 2024 Supreme Court ruling granting full financial autonomy to Nigeria’s 774 Local Government Areas, The PUNCH learnt that the allocations were still paid to state government accounts.

This, it was learnt, has irked officials and members of the Association of the Local Governments of Nigeria and National Union of Local Government Employees.

The landmark Supreme Court ruling directed that funds meant for LGs should be paid directly into their accounts, bypassing state governments, in an effort to promote autonomy and ensure that the funds allocated to local governments were properly utilised.

Nearly six months after the judgment, the Federal Government had not effected direct payment of allocations to the local governments, as directed by the apex court.

The PUNCH reported that the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government was yet to commence direct payment to the respective LGs due to some “practical impediments.”

He added that a committee had been set up by the Federal Government to look at the practicability of the judgment.

The Federal Government, it was learnt, faced challenges implementing the ruling on local government financial autonomy, with concerns over its impact on salary payments and operational viability.

An analysis of communiqués released after the monthly meeting of Federation Accounts Allocation Committee showed that from July to December 2024, the total distributable revenue amounted to N8.351tn, which was shared among the Federal Government, States, and Local Government Councils. The disbursements for each month were as follows:

In July 2024, the total revenue shared was N1.354tn. The Federal Government received N459.776bn, while the States received N461.979bn and the Local Government Councils received N337.019bn.

In August 2024, the total distributable revenue increased to N1.358tn. The Federal Government received N431.079bn, the States N473.477bn, and the LGCs N343.703bn, a slight increase of N6.684bn from the previous month. This represents a 2 per cent increase in the amount allocated to LGCs.

September 2024 saw a decrease in the total distributable revenue, which fell to N1.203tn. The Federal Government received N374.925bn, the States N422.861bn, and the Local Government Councils N306.533bn. This marked a significant drop of N37.170bn in LGC allocations compared to August 2024, a decrease of 10.1 per cent.

In October 2024, the total distributable revenue rose to N1.298tn. The Federal Government received N424.867bn, the States received N453.724bn, and the LGCs received N329.864bn. This marked an increase of N23.331bn, representing a 7.6 per cent rise in allocations to the LGCs from September.

The trend continued in November 2024, with the total distributable revenue increasing to N1.411tn. The Federal Government received N433.021bn, the States received N490.696bn, and the Local Government Councils received N355.621bn. This represented an increase of N25.757bn, or 7.8 per cent, compared to the previous month for LGC.

In December 2024, the total distributable revenue reached N1.727tn, the highest amount of the six-month period. The Federal Government received N581.856bn, the States N549.792bn, and the Local Government Councils received N402.553bn. This was the largest allocation to the LGs, with an increase of N46.932bn, which equated to a 13.2 per cent rise from November.

Over the six-month period, the total amount allocated to the Local Government Councils was N2.075tn out of the N8.351tn total distributable revenue. This allocation represents approximately 24.9 per cent of the total revenue shared.

The PUNCH further observed that there was a 72.06 per cent increase in the allocations to local governments between July to December 2024 when compared to the same period of the previous year.

This means that there was an increase of N869bn from the N1.206tn allocated to local government councils within the same period last year.

The month of December saw the highest allocation to LGCs, marking a significant 13.2 per cent increase from the previous month. This sharp rise in December followed a steady upward trajectory in LGC allocations, with the biggest percentage increase seen in the final month of the year.

Despite these large disbursements, the question of whether the Supreme Court’s directive will be fully implemented remains unanswered.

In July this year, the Supreme Court declared that it is unconstitutional for state governors to hold funds allocated for local government administrations.