Controversy over Soludo’s Law on LG Funds

The financial autonomy recently granted to local governments by the Supreme Court is facing a fresh obstacle in Anambra State as Governor Charles Soludo last week signed into law a new bill to compel local governments in the state to remit a portion of their federal allocations into a consolidated account to be controlled by the state government.

The Supreme Court had on July 11, 2024, held that local governments across the country should, henceforth, receive their allocations directly from the Accountant-General of the Federation. It ruled that it is illegal and unconstitutional for governors to receive and withhold funds allocated to local governments in their states.

However, in the new law titled: ‘Anambra Local Government Administration Law 2024,’ Section 13(1) provides that the state shall maintain a “State Joint Local Government Account,” into which all federal allocations to local governments in Anambra State must be deposited.

Section 14(3) of the bill stipulates that each local government in the state must remit a state-determined percentage to the consolidated account within two working days of receiving their allocations from the Federation Account.

Section 14(4) maintains that if the state receives the local government allocation on their behalf, it must deduct the specified percentage before disbursing the remaining funds to the local governments.

The Commissioner for Information in Anambra State, Law Mefor, defended the bill, saying that the state government acted under Section 7 of the Nigerian Constitution, which empowers the state assembly to make laws regulating the local government.

The commissioner argued that the section of the constitution empowers the state government to “oversee” the affairs of the local governments both in administration and finance.

He said the state government aimed to “safeguard” the finances of the local governments and “direct” council chairpersons to their responsibilities, especially for projects often carried out in collaboration with the state government.

The commissioner criticised those opposing the bill, saying that they would have turned around to blame the state government when the local government administrators abandon their statutory responsibilities like payment of pensions.

Soludo’s critics have however argued that the new law is not only a big affront and disregard but a disobedience of the highest court of the land, the Supreme Court.