The Federation Account Allocation Committee (FAAC) has released a total sum of N860.252 billion to state governments for the month of January. This allocation comprises N498.498 billion for the states and N361.754 billion for local governments. However, due to the local governments' inability to meet the deadline for submitting their account details, the January allocations will be disbursed through the states.
Direct Transfer to Local Governments Delayed
The direct transfer of allocations to the 774 local governments has been delayed due to their inability to open dedicated bank accounts with the Central Bank of Nigeria (CBN). This development has resulted in the commission transferring the January allocations to state governments instead. According to a FAAC official, the councils' failure to submit their account details on time was the primary reason for this decision. The official stated that if the councils can submit their details promptly, they will receive their allocations directly from February.
Framework for Local Government Autonomy
In a bid to enforce the Supreme Court judgment granting financial autonomy to local governments, an Inter-Ministerial Committee headed by the Secretary to the Government of the Federation (SGF), Senator George Akume, is developing a framework. This framework aims to ensure transparency and accountability in the disbursement and use of council funds. The template will authorize the Accountant-General of the Federation (AGF) to deduct funds meant for primary education, healthcare, and other constitutional responsibilities of local governments directly from FAAC allocations.
Supreme Court Judgment and Financial Autonomy
The development comes after the Supreme Court granted financial autonomy to local governments in July 2024, setting a precedent for grassroots governance. The Federal Government has directed all local governments to open dedicated bank accounts with the CBN for the direct transfer of their monthly allocations. This move aims to curb the undue control over local government funds by governors and ensure transparency and accountability in financial disbursements.
Association of Local Governments of Nigeria (ALGON) Reacts
The national president of the Association of Local Governments of Nigeria (ALGON), Bello Lawal Yandaki, has assured stakeholders that there is no cause for alarm over the failure of the councils to open the accounts. He attributed the delay to procedural issues on the part of the local governments. Yandaki stated that the CBN is awaiting directives from the Federal Government to open local government accounts for the respective states, which can be done within 24 to 48 hours for each. Once the accounts are fully operational and the necessary details submitted, the disbursement will proceed without further delay.
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