Constitutionality of Payment of Federal Allocation Directly to Local Government Councils

In the Supreme Court of Nigeria

Holden at Abuja

On Friday, the 11th day of July, 2024

Before Their Lordships

Mohammed Lawal Garba

Emmanuel Akomaye Agim

Chioma Egondu Nwosu-Iheme

Haruna Simon Tsammani

Moore Aseimo Abraham Adumein

Habeeb Adewale Olumuyiwa Abiru

Jamilu Yammama Tukur

Justices, Supreme Court

SC/CV/343/2024

Between

 Attorney-General of the Federation                                                 Plaintiff

And

Attorney-General of Abia State & 35 Ors           Defendants

(Lead Judgement delivered by Honourable Emmanuel Akomaye Agim, JSC)

Facts & Issues for Determination 

The Plaintiff invoked the original jurisdiction of the Supreme Court vide its Originating Summons dated 24/05/2024. Fifteen questions relating to the constitutional status of Local Government Councils, legality of State Governors dissolving democratically elected Local Government Councils using State powers, as well as receiving and spending funds meant for the Local Government Councils, and propriety of the Federal Government paying directly to the Local Government Councils the amount standing to their credit in the Federation Account.

Further to the determination of the questions raised, the Plaintiff sought the various declaratory reliefs and order, including payment of Federal allocations directly from the Federation Account to the Local Government Councils and prosecution of officials of the States who dissolve democratically elected Local Government Councils.

Upon being served with the Originating Summons, the Defendants filed their Counter Affidavits and raised different Preliminary Objections to the competence of the suit. All the Preliminary Objections bordering on failure of the Registrar of the Supreme Court to sign the Summons; lack of locus standi; failure to disclose existence of dispute between the Federal Government and the States to activate the original jurisdiction of the Supreme Court; issue-estoppel/res-judicatam; academic/speculative issue; non-joinder of the Houses of Assembly and Local Government Councils; were dismissed by the Apex Court.

Arguments

The Plaintiff submitted that the action was brought for the interpretation and enforcement of the Constitution of the Federation Republic of Nigeria, 1999 (as amended), which the President and Governors of the 36 States, swore to uphold. He posited that the Constitution recognises three tiers of government at the Federal, State and Local Government levels, which tiers draw funds from the Federation Account for their operations. The Constitution, also guarantees and recognises only a democratically elected local government system of governance, which the Defendants have failed to put in place, though there is no state of emergency declared in any of the States. The Plaintiff submitted further that, funds due to the Local Government Councils from the Federation Account and paid into the State Joint Local Government Account, are received by the States in trust for the benefit of democratically elected Local Government Councils in the States. Counsel argued that it is not the place of the States to dissolve democratically elected local government councils, and make deductions from funds remitted to the Local Government Areas. Counsel urged the court to grant all the stringent reliefs sought, to ensure compliance by the Defendants.

The Defendants argued otherwise. They contended that the Federation cannot validly pay the money standing to the credit of the Local Government Councils from the Federation Account directly to them, as to do so would be in violation of Section 162(5) and (6) of the 1999 Constitution which stipulate that the funds be paid to the States for the benefit of their Local Government Councils. They excused their failure to organise the conduct of elections in the States, on subsisting restraining orders of courts.

Court’s Judgement and Rationale

Deciding the question of the Federation paying directly to the Local Government Councils, the Supreme Court held that by the provisions of Section 162 (6), (7) and (8) of the Constitution, no law of the House of Assembly can validly interfere with money distributed to the Local Government Council from the Federation Account under Section 162(3). Further, by Section 7(1) of the 1999 Constitution, local government shall be by democratically elected Local Government Councils. The States, not being a democratically elected Local Government Council cannot exercise the power of such Council. Thus, the retention and use of money standing to the credit of the Local Governments from the Federation Account paid to the States for the benefit of the Local Government Councils is unconstitutional and illegal.

The Supreme Court held that Section 162(5) and (6) of the 1999 Constitution merely provide a method or procedure of getting the amount distributed to the Local Government Councils under Section 162(3). To interpret any procedural provision of the Constitution in a manner that would not only stultify, emasculate and frustrate, but eventually render other provisions which create and confer substantive rights, barren and merely decorative, is with respect, arcane and rancid. The States are merely agents of the Federation, to collect local government allocations from the Federation Account and pay to them. No right or interest in the money enures to the States under the Constitution, but the States have abused their duties and roles by retaining the funds allocated to the Local Government Councils. The court held further that interpretation of the Constitution must accord with the principles suitable to its spirit and character, and not necessarily according to the general rules of interpretation of statutes and documents. Given its sui generis nature, a suitable interpretation must be benevolent, broad, liberal and purposive – NWOSU v APP (2020) 16 NWLR (PT. 1749) 28 AT 80 SC.  A literal and narrow construction of the word “shall” in sub-section (5) of Section 162 as imposing a mandatory duty on the Federation, will work against the intention and purpose of the Constitution and create an unconstitutional status quo and oppressive situation. The court, therefore, employed its interpretative jurisdiction to treat the word as meaning “May”, thereby institutionalising another mode of payment of funds due to Local Government Councils. In view of the above, the Apex Court held that payment can either be made directly by the Federation or through the States; however, since the latter has not been effective, the justice of the case demands that the Local Government Council allocations be paid directly to them, henceforth.

Regarding the issue of Local Government Areas, the court held that by Sections 1(2) and 7(1) of the 1999 Constitution, Local Government Councils must be democratically elected. Thus, an interim, caretaker committee, administrator, or howsoever described, is unconstitutional. A State Government has no power to constitute, appoint or determine a Local Government in contravention of Section 7(1) of the Constitution.

In conclusion the Supreme Court held that the claims of the Plaintiff succeed and by its majority decision of five, granted all the reliefs sought.

Dissenting Opinions

His Lordship, Garba, JSC, opined that relief 10, which seeks to prosecute erring officials of the States who dissolve democratically elected Local Government Councils for breach of applicable criminal and penal laws, cannot be granted by the court, as there is no provision which criminalises non-compliance with the provisions of the Constitution. His Lordship was also of the opinion that reliefs 15, 16 & 17 had been overtaken by the grant of other reliefs.

His Lordship, Abiru, JSC, differed on the determination of the question of the Federation paying directly to Local Government Councils. His Lordship opined that the Plaintiff failed to establish the alleged non-remittance of the funds by the States, and being declarative reliefs, the Plaintiff must succeed on the strength of his case. It is the opinion of His Lordship, that it is neither the business of the Plaintiff nor the court, to decide on how the funds allocated to the Local Government Councils should be spent. The Local Government Councils may choose to cede part of the funds to the States, to spend on their behalf. The Constitution does not provide for an oversight function of the Federal Government, in this regard. 

His Lordship opined further that a liberal or broad interpretation cannot be employed to fill perceived gaps in the Constitution, as it is the duty of the legislature to do that. The prayer of the Plaintiff is an invitation for the court to engage in judicial legislation, and to interpret the Constitution in a manner which will undermine the very foundation of the nature of federalism. 

His Lordship therefore, answered Questions 12 and 15 in favour of the Defendants and dismissed reliefs 9, 10, 12, 14, 15 and 17.

Summons Succeeds. All the reliefs granted by majority decision.

Representation

Lateef Fagbemi, SAN (AGF & Minister of Justice) with other Counsel for the Plaintiff.

Attorneys-General of the States with other Counsel for the 36 States.

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Reports (NMLR)(An affiliate of Babalakin & Co.)