Beyond Rhetoric of Financial Autonomy for Local Govt Councils

Following the order of the apex court stopping state governments from tampering with the funds meant for Local Government Councils in the country, the federal government may have won the battle but lost the war against grassroots development, writes Alex Enumah

Last Thursday’s landmark judgement of the Supreme Court in favour of Local Governments autonomy continues to receive great accolades and commendation, with some even calling for the take over of the functions of State Independent Electoral Commission (SIEC) by the Independent National Electoral Commission (INEC), to ensure that state governors are completely blocked from putting people in office that they can easily influence.

Ironically, the governors who had locked horns with the federal government in the legal battle at the apex did not condemn the verdict against them, but described their perceived loss as a blessing.

Speaking shortly after their meeting with President Bola Tinubu at the State, the Nigeria Governors Forum (NGF) had observed that the judgement is a big relief on them. Governor of Kwara State and Chairman of the NGF, AbdulRazaq AbdulRahman, who spoke on behalf of his colleagues had stated that, “by and large, governors are happy with the devolution of power in respect of local government autonomy. It relieves the burden on governors”.

According to him, the people really don’t know how much states expend in bailing out local governments, “and that’s the issue there”. AbdulRahman explained that what the local governments have to do henceforth is to manage themselves, “especially with the incoming minimum wage, to manage their affairs and make sure salaries are paid, traditional rulers get their five per cent and those are the main issues”.

In essence, the governors are saying they are okay with the divorce pronounced on their marriage with the LGAs. Like observed by the apex court in its judgement, before 1999 local governments like the states usually throng to Abuja for the monthly Federal Account Allocation Committee (FAAC) for their allocations. However, to reduce the burden of travel and other concerns, the states and local governments entered into a marriage of convenience in 1999, through Section 162 of the Constitution.

Section 162(3) of the Constitution stipulates that “Any amount standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the Local Government Councils in each State on such terms and in such manner as may be prescribed by the National Assembly.

While, Section 262(5) stipulates that “The amount standing to the credit of Local Government Councils in the Federation Account shall also be allocated to the State for the benefit of their Local Government Councils on such terms and in such manner as may be prescribed by the National Assembly”, Section 162(6) stipulated that “each State shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the Local Government Councils of the State from the Federation Account and from the Government of the State.

Subsection (7) on the other hand stipulates that “Each State shall pay to Local Government Councils in its area of jurisdiction such proportion of its total revenue on such terms and in such manner as may be prescribed by the National Assembly, while subsection (8), holds that “The amount standing to the credit of Local Government Councils of a State shall be distributed among the Local Government Councils of that State on such terms and in such manner as may be prescribed by the House of Assembly of the State.

Monthly, the federal government, states and LGAs receive their allocations from the Federation Account. While 52.68% goes to the federal government, 26.72% goes to the state and 20.60% to the local governments.

Going by the above Section, the states for over two decades have been collecting funds and also administering same on behalf of their LGAs. But, that has ended with the judgement of the apex court that barred the FAAC from channeling LGAs’ funds through the states or paying into the State Joint Local Government Account. The apex court took the decision based on its conviction that the governors were denying the LGAs necessary funds needed for development of the grassroots.

Now that funds would go directly to the local governments, it is ordinarily expected that they would begin to embark on developmental projects at the grassroots or engage the people more in the governance process. But, this, however, may be far from reality. Just like it is obtainable at the federal and state levels, the chairmen and councillors at the LGAs may embark on spending spree, paying themselves bogus allowances and even engage in converting public funds to personal use.

One of the arguments in support of the action of the federal government and the judgement of the apex court is that since the LGAs are closer to the grassroots they could easily be made to account for the funds allocated to them. If government officials at both the state and federal levels are hardly held accountable what is the guarantee that it would start with the LGAs?

Going back to the states which had seen the judgement as relieving them of a huge burden, there is no doubt that a lot of bills and responsibilities such as development and maintenance of primary healthcare, basic education and lots more at the local level would now be shifted to the LGAs.

Convinced that LGAs bridge the gap between government at the center and the grassroots, former governor of Lagos State and now President, Bola Ahmed Tinubu had in 2002 embarked on the creation of Local Council Development Authority (LCDA) in Lagos State. Despite the fact that the federal government as well as the Constitution in its several amendments refused to accord the LCDAs the same recognition and status of the LGAs, this has not discouraged other states from establishing LCDAs.

The funding of the LCDAs was not an issue since the states usually extend allocations of the LGAs to LCDAs. Now that the judgement of the court is with immediate effect the LCDAs have become the first victim as the LGAs may not be willing to share their allocations. The same goes for the governors who have already indicated removing their shoulders from the burdens of the LGAs.

Meanwhile critics of the judgement have argued that any genuine effort at local government autonomy must go through a proper constitutional amendment. In condemning the verdict, a former governor of Delta State, Chief James Ibori claimed that the “Supreme Court has dealt a severe setback on the principle of federalism as defined by section 162(3) of the 1999 Constitution as amended”.

According to Ibori, the federal government has no right to interfere with the administration of local governments under any guise whatsoever. “There are only two tiers of government in a federal system of government”, he said.

“The ruling potentially shifts the balance of power between the federal government and states. By allowing federal intervention in local government finances, it arguably centralizes more power at the federal level, contrary to the principles of federalism”, Ibori added.

The former Delta governor further argued that the ruling may impact the financial independence of states and local governments, adding that, “if the federal government can directly intervene in local government finances, it could potentially use this as a tool for political leverage”.

However, only time will tell the rightness or not of the July 11, 2024 verdict of the seven-member panel of the apex court led by Justice Mohammed Garba.

The apex court in a lead judgement delivered by Justice Emmanuel Agim had berated the governors for running the LGs as if they were their stooges. They further faulted the arbitrary and unilateral manner in which the governors disburses and manage funds belonging to the third-tier of government.

It is the position of the Supreme Court that the retention of funds belonging to the LGs have brought unnecessary hardship on the people in the various local government areas.

Hence, the need to ensure constitutional provisions of running the LGs through democratically elected officials as well as ensuring that funds belonging to the LGs were not tampered with by the states.

It was the conclusion of the apex court that although Section 162 of the 1999 Constitution of the Federal Republic of Nigeria directed the payment of their monthly allocations to a joint account, the aim of that law has been defeated owing to the retention of the funds by the states and arbitrary usage.

To prevent the governors from further exploiting the said law, the apex court held that it is the responsibility of the apex court to make a law to serve the interest of the people and the country in general.

Justice Agim held that, “since paying to the LGs through the state has not worked, the money should henceforth be paid to the LGs directly”.

On the issue of appointing caretaker committees to take over governance at the local government level, the apex court reiterated its previous judgements wherein it declared such as illegal, unlawful, null and void.

The apex court in the judgement held that state houses of assemblies lacked powers to make laws empowering governors to appoint caretaker committees.

Agim made a declaration that any governor who dissolves any democratically elected local government greatly breaches the Constitution and commits an act of gross misconduct.

He subsequently granted the reliefs sought by the federal government, which include; an order of the apex court stopping governors from constituting caretaker committees to run the affairs of local governments as against the constitutionally recognized and guaranteed democratic system.

The apex court also made an order of injunction restraining the governors, their agents and privies from receiving, spending or tampering with funds released from the Federation Account for the benefits of local governments when no democratically elected local government system is put in place in the states.