Making Local Governments Viable through Fiscal Autonomy

The fiscal relationship between the state and local governments has remained a major hindrance to inclusive economic growth in the country and contributes significantly to the high level of poverty in the rural areas, writes Obinna Chima

Since Nigeria’s return to democracy, there has been an increasing clamour for the local government, which is the third tier of government to be autonomous in order to ensure effective service delivery at the grassroots.

While constitutionally, local government is supposed to exist as an independent entity, with some amount of autonomy and sovereignty, that has not been the case due to the overbearing influence of the state governors. The governors made it difficult for the local government to perform their constitutionally assigned roles by not providing it with adequate revenue as allocated by the Federation Account Allocation Committee (FAAC).

This unfortunate situation was once more brought to the fore by President Muhammadu Buhari last week, who accused state governors of misappropriating funds meant for the local government councils in their respective states.

Speaking at the Conference Hall of the State House, Abuja, at an event hosted for members of the Senior Executive Course 44 (2022) of the National Institute for Policy and Strategic Studies (NIPSS), Kuru, the president expressed concern over what he described as governors’ unfair treatment of the administration at the local government level.

Citing the personal experience involving an unnamed governor, Buhari x-rayed the sort of corrupt practices perpetrated by some governors in dispensing resources meant for local councils’ administrations. 

According to him, it beats anyone’s imagination how some state governors would collect money on behalf of council areas in their states, only to remit just half of such allocation to the local government council Chairman, who would further deplete the remittance in further pilfering of public resources.

He, however, related the development to the question of lack of integrity in the character of many of those holding such offices like governorship and council chairmanship.

The president added that such actions were rather despicable and spoke of the height of corruption in the country.

“Speaking from personal experience, a chief executive of a state, a qualified lawyer, trained, the treatment of local governments, what they did, this is my personal experience. If the monies from the federal government to state governments is N100 million, N50 million will be sent to the chairman with a letter that he will sign that he received N100 million. 

“The governor will pocket the balance and share it with whoever he wants to and then the chairman of the local government will see how much he must pay in salaries, to hell goes development. Money for salaries will be given and the balance will put in his pocket. This is what is happening.”

Even though some of the state governors have since distanced themselves from the allegation by Buhari, the widely help opinion is that the state governors, through their overbearing influence over the years deliberately crippled the local government system across the country, a situation believed to have laid the foundation for the current widespread insecurity, governors. It is believed that one of the main reasons the governors want to maintain their dictatorial attitude towards the local governments is so as not to whittle down their powers as ‘godfathers’ as well as break their selfish control and financial manipulation of the local government system.

“The governors want to ensure that they continue to collect local government allocations, which they mismanage. And as we all know most of them are always in Abuja every month, they wait, collect fund from FAAC and they disappear.

“Their over 20 years of disinvestment in the local government system is what has led to the rise in insecurity, banditry, kidnapping and increase in social vices across the country,” a source who pleaded anonymous said.

Also, a former National President, Nigeria Union of Local Government Employees (NULGE), Ambali Olatunji, had alleged that the illegality perpetrated by governors was responsible for the destruction of the local government system in the country.

Ambali had told THISDAY that the root of insecurity as well as socio-economic challenges bedeviling the country was traceable to the mismanagement of the local government system by state governors.

According to him, “As at today, you can no longer move from one state to another without initially asking if you will get home safely. Insecurity in the south, east, west and north. This is not the Nigeria of our dream. We are bedeviled by abject poverty, joblessness, hopelessness, threat to the nationhood.

“This can be traced to the systematic decay and destruction at the local government level. Local government system is the most strategic, most relevant, most popular and most acceptable tier of government in the country.”

He also called for direct funding of the local governments, saying allowing state governments to be in charge of local government fund was synonymous to giving same food to a lion and a dog and you ask them to go and share them.

To the Vice President, Prof. Yemi Osinbajo, there is need for state Houses of Assembly to speedily ratify the bill seeking total autonomy and devolution of powers to the local government councils in the country.

According to Osinbajo, who also lamented that the third tier of government had over time been neglected and undervalued, local governments play key roles towards nation building.

He maintained the ongoing constitutional amendment seeking to allocate more powers to the local governments was a step in the right direction.

“While the roles of state governments and their scope of authority appear very well appreciated, local governments remain, in my view, quite undervalued, needing more attention from all of us, better funding, organisational and high quality leadership.

“As we speak, a bill for local government autonomy is striving hard to pass the threshold of 24 votes required from state Houses of Assembly, a key milestone towards its passage.

“I believe that efforts being made, through the ongoing constitutional amendment, to cede more responsibilities for control and management of resources to local governments across the country reflect our understanding of how crucial it has become for this tier of government to take full charge of their responsibilities and functions at optimal capacity.

“After all, it is often argued that local government is closest to the people and best placed to impact on their lives,” he said at the weekend while delivering the “Distinguished Annual Lecture” of the National Institute for Policy and Strategic Studies (NIPPS), Kuru, near Jos, the Plateau State.

The vice president argued that local government’s fiscal autonomy would promote peace and security in the country, adding that people at rural communities understand their terrain better and know how to deploy resources towards tackling security challenges.

He insisted the yearning for local government autonomy was a step in the right direction and called on state assemblies to expedite actions toward ratifying the autonomy bill.

He added the advantages that come with local government autonomy are obviously enormous, adding that it would further consolidate on Nigeria’s democratic system.

 “It is my firm belief that we must strengthen our sub-national administrative units via further devolution of powers and resources for effective performance,” he said.

Also, the Emir of Kano, Alhaji Aminu Ado-Bayero, strongly believes that there is a strong nexus between effective local governance and sustainable development, insisting that Nigeria should not be left behind in this paradigm shift.

He maintained that an effective local authority would address poverty, hunger, inequality, insecurity, illiteracy, and other challenges currently facing the nation.

In his contribution, the Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the way state government manage local government funding was responsible for the high level of poverty in the country.

According to him, accountability at the local government level is almost zero. He stressed the need to also strengthen capacity at the local government level, just as he called for stronger citizens’ engagement. He urged all Nigerians to hold their leaders at the local and state government levels accountable.

Clearly, from the foregoing, the fiscal relationship between the state and local governments has remained a major hindrance to inclusive economic growth in the country and contributes significantly to the high level of poverty in the rural areas.

Therefore, in order for the local governments to effectively carry out their constitutional duties, there is need to grant them fiscal independence and some level of autonomy.