Return LG Funds Collected or Face Legal Action, SERAP Tells Governors

The Socio-Economic Rights and Accountability Project (SERAP) has called on Nigeria’s 36 governors and the FCT minister to return funds allocated to local governments, following a Supreme Court decision declaring their use of these funds unlawful. SERAP warned that failure to comply would result in legal action.

The Supreme Court has barred the governors from retaining or utilizing funds meant for the 774 Local Government Areas (LGAs) across the country. The court ruled that it is illegal and unconstitutional for governors to seize LGA funds.

Justice Emmanuel Agim, delivering the lead judgment, stated that no state House of Assembly has the authority to pass laws that interfere with LGA funds. The court emphasized that LGAs must be governed by democratically elected officials, and ordered that funds must be paid directly to LGAs from the federation account.

The Supreme Court noted that the long-standing practice of governors controlling LGA funds violated Section 162 of the 1999 Constitution, as amended. The court declared that justice requires a progressive interpretation of the law, mandating direct payment of LGA allocations from the federation account due to the failure of the previous system where states managed these funds.

Additionally, the court declared the appointment of caretaker committees by governors to manage LGA affairs unconstitutional, insisting that states must ensure democratic governance at the local level.

This judgment followed a suit filed by the Federal Government to secure financial autonomy for LGAs. The court dismissed preliminary objections raised by state governors challenging the competence of the suit.