EFCC to Monitor LG Funds as Financial Autonomy Begins in November

Barring any last-minute opposition from state governors, Nigeria is set to commence direct allocation payments to Local Government Areas (LGAs) in November 2024. Hakeem Ambali, National President of the National Union of Local Government Employees (NULGE), confirmed this development in an interview on Sunday.

The Economic and Financial Crimes Commission (EFCC) has pledged to closely monitor the financial activities of all 774 local government chairpersons, ensuring that funds disbursed from federal allocations are transparently and effectively utilized. This move is seen as a landmark step toward implementing local government autonomy, as recently upheld by the Supreme Court, and in anticipation of the October 31 deadline for state-conducted local government elections.

The push for autonomy escalated in May when the Federal Government, led by Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, filed a lawsuit to prevent governors from accessing or withholding funds meant for LGAs. The suit argued that governors should not dissolve democratically elected councils or form caretaker committees, citing the constitutional requirement for an elected local government structure.

In a landmark July 2024 decision, the Supreme Court ruled in favor of financial independence for LGAs, barring governors from controlling council funds. Justice Garba Lawal, who led the Supreme Court panel, declared the non-remittance of these funds unconstitutional and directed the Accountant-General to deposit allocations directly into LGA accounts. The ruling was followed by a three-month moratorium from the Federal Government to address salary and operational concerns.

To support the transition, the Federal Government established a 10-member inter-ministerial committee to implement the Supreme Court’s ruling. Chaired by the Secretary to the Government of the Federation, George Akume, the panel submitted its findings on October 13. Members of the committee include key officials such as Wale Edun, Minister of Finance, and Olayemi Cardoso, Governor of the Central Bank of Nigeria, as well as representatives from both state and local government bodies.

Recent reports indicate that over 160 LGAs in eight states are yet to conduct required elections, with the Federal Government warning of potential seizure of their allocations if non-compliance persists. However, Ambali assured that preparations are in place for the November commencement of direct allocation payments, with NULGE and other unions actively urging the presidency to withhold funds from states that resist implementing LGA autonomy.

Ambali remarked, “We want to ensure everything is in place to avoid issues, particularly as some governors are attempting to retain control, as seen in Abia State.”

EFCC Chairman Ola Olukoyede emphasized the agency’s readiness to oversee budget performance across LGAs, aiming to ensure accountability. He criticized the historical influence of state governments over local resources, citing the recent charges against former Taraba State Governor Darius Ishaku for allegedly misappropriating LGA funds. According to Olukoyede, EFCC has expanded its presence nationwide, aiming to enforce strict accountability within LG councils and prosecute any misappropriation.

Meanwhile, some governors have requested additional time to transition to direct allocations, a period which expires in October. Daudu Clifford, NULGE’s Edo State President, highlighted that any delay beyond November would contravene the Supreme Court ruling, which holds council chairpersons accountable for releasing funds to state governments without legal grounds.

The Association of Local Governments of Nigeria (ALGON) and other regional representatives have confirmed that preparations are ongoing. Aminu Kaita, ALGON’s National President, stated that the timeline set for October remains intact, and councils are actively working to meet compliance requirements. However, some LGAs, including those in Zamfara and Sokoto, are awaiting confirmation on the allocation process, with others declining to comment until the policy’s effects are clear.

As the November start date approaches, LGAs are expected to experience enhanced financial independence, marking a shift toward self-governance that may bring significant development to Nigeria’s grassroots communities.