The Supreme Court has mandated that allocations to Local Governments from the Federation Account be paid directly to them.
A seven-member panel led by Justice Mohammed Lawal Garba ruled that state governors’ practice of withholding funds meant for Local Government (LG) administrations violates Section 162 of the 1999 Constitution, as amended.
In the lead judgment delivered by Justice Emmanuel Agim, the court prohibited the 36 state governors from retaining or using funds designated for the 774 Local Government Areas (LGAs) in Nigeria. Justice Agim stated that no state legislature has the authority to enact laws that interfere with LGAs’ funds.
“The demands of justice require a progressive interpretation of the law. This court holds that the Federation can directly pay LGA allocations or channel them through the states. Since the latter method has proven ineffective, justice demands that LGA allocations from the Federation Account be paid directly to the LGAs,” the court declared.
The court also ruled that appointing caretaker committees by governors to manage LGAs is unconstitutional. It emphasized that states must ensure democratic governance at the local level.
The court dismissed the preliminary objections of the state governors, challenging the Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi’s right to file the suit. This ruling follows a suit filed on May 20, 2024, by the AGF on behalf of the Federal Government.
The AGF sought full autonomy for Nigeria’s 774 local governments and requested an injunction preventing governors and their agents from handling funds meant for local governments unless a democratically elected local government system is in place.
The AGF argued that the Constitution mandates a democratically elected local government system and that state governors have failed to implement such a system, thereby subverting the Constitution.
In response, the states argued that the AGF lacked the legal right to file the suit and claimed their right to a fair hearing was violated when they were not served with a supporting affidavit.
The Supreme Court’s ruling aims to enforce constitutional provisions ensuring democratic governance and proper allocation of funds to local governments.
