Financial Autonomy Under Threat: Govs, LG Chairmen Enter Secret Deals to Bypass Order

Amid growing revelations, some Nigerian governors have reportedly developed secret agreements with local government chairmen to retain control over council funds, despite a Supreme Court ruling granting financial autonomy to the 774 local government areas (LGAs). According to sources, these deals involve pledges of loyalty and covert agreements aimed at circumventing the directive for direct allocation of funds to the LGAs.

Background on Financial Autonomy for LGAs

The Supreme Court’s ruling on July 11 mandated the direct payment of funds from the Federation Account to local governments, signaling a significant shift in Nigeria’s federal financial structure. Following this ruling, the Federal Government, on August 20, established a 10-member inter-ministerial committee, led by the Secretary to the Government of the Federation, George Akume, to ensure the implementation of the judgment. The panel is expected to submit its report by October 14.

However, shortly after the ruling, state governors requested a three-month delay in the direct allocation process to allow them to conduct local government elections. Since then, states including Ebonyi, Bauchi, Kebbi, Oyo, Kwara, Imo, Enugu, Sokoto, Akwa Ibom, Anambra, Benue, and Rivers have conducted elections for local government chairmen.

Allegations of Secret Deals

Despite the anticipated autonomy, findings by Sunday Punch reveal that governors are still maneuvering to retain control over council funds through secret deals. A local government chairman in the South-West, who spoke anonymously, confirmed that he and his colleagues were compelled to pledge their loyalty to the governor following the Supreme Court judgment. “We met the governor and pledged our allegiance to him… We told him we would always abide by his directive on our LG funds,” he stated, hinting that refusal to do so could have jeopardized their election.

A senior media officer from the same state added that part of this loyalty involved remitting a significant portion of the council’s funds to a state account. Under this arrangement, after payment of teachers and staff, chairmen would retain ₦5 million as a security vote, while ₦10 million would be allocated for the running of the council. The remainder of the funds would be sent to the state.

In another southern state, a local government chairmanship candidate revealed that candidates had to take an oath pledging to follow the governor’s directives on council finances before being cleared to run for office.

Resistance and Calls for Accountability

Some voices, however, have urged council chairmen to resist such pressures from governors. Wale Adedayo, a former local government chairman in Ogun State, who was removed from office after accusing the state governor of diverting council funds, urged the Federal Government to establish mechanisms to monitor local government finances. Adedayo suggested that President Bola Tinubu could follow the example of former President Shehu Shagari, who appointed presidential liaison officers to oversee local government activities across the states.

Adedayo warned that governors are seeking to dismantle existing oversight bodies like the Economic and Financial Crimes Commission (EFCC) to avoid scrutiny, a concern echoed by other political analysts.

Challenges in Revenue Allocation

In addition to the control of funds, local government officials have raised concerns about the current revenue-sharing formula. Babatunde Emilola-Gazal, the former chairman of the Ogun State chapter of the Association of Local Government of Nigeria (ALGON), described the existing formula as “unfair and skewed” in favor of the federal and state governments. Under the current arrangement, local governments receive only 20.6% of the revenue from the Federation Account, while states receive 26% and the Federal Government takes 52%. Emilola-Gazal argued that this imbalance leaves many local governments struggling to meet their financial obligations, even if funds are allocated directly.

Response from ALGON

The leadership of ALGON is reportedly aware of the ongoing schemes by governors. Mohammed Abubakar, Secretary-General of ALGON, assured that the board of trustees is closely monitoring the situation and is committed to ensuring the implementation of financial autonomy. However, he acknowledged that many local government chairmen are reluctant to speak out due to fear of reprisal from their governors.

Abubakar added that attempts to divide the association are being countered, and he expressed confidence that the board would soon take concrete steps to enforce the autonomy granted by the court ruling.

As the October deadline for the commencement of direct allocation approaches, all eyes are on the Federal Government and local government leaders to ensure the long-overdue financial independence of councils across the country is upheld.

This article is sourced from The Punch newspaper, with minor edits and adaptations by The Spectacles for clarity and readability.