The Supreme Court has mandated that the federal government should immediately start disbursing funds directly to Local Governments from the federation account, bypassing state administrations. This ruling aims to enhance financial autonomy for the 774 local governments across the country and to curb the longstanding misuse of funds by state governments.
The judgment was delivered on Thursday by Justice Emmanuel Agim in a suit that pitted the Federal Government against the governors of all 36 states. The central issue was the autonomy of local governments concerning their financial allocations, which have historically been managed and disbursed by state governments.
Justice Agim pointed out the habitual abuse in the system where state governments have been handling the funds meant for local governments. “I hold that the federal government pay LG allocations to the Local Government directly,” Justice Agim decreed, marking a significant shift in the handling of public finances. This direct approach is intended to ensure that the funds reach the intended grassroots levels without undue interference.
The suit was initiated by Lateef Fagbemi, the Attorney-General of the Federation and Minister of Justice, who argued that the retention of funds by the states violated Section 162 of the 1999 Constitution. This section stipulates that the distribution of the nation’s finances should be equitable among all tiers of government, ensuring that each level receives its rightful share to enable governance and development.
The ruling is seen as a critical step toward enhancing local governance and accountability. By directing funds straight to local governments, the Supreme Court aims to empower these entities to manage their resources more effectively and independently. This change is expected to lead to improved local services, infrastructure development, and an overall increase in governance efficiency at the local level.
Many parties have responded favorably to the decision, seeing it as a step in the direction of more local government autonomy and financial openness. Direct funding is thought to reduce financial mismanagement while also empowering local governments to plan and carry out community-specific projects without the delays and headaches that come with state-level administration.
In addition to defining the roles and obligations of the federal and state governments in budgetary concerns, this decision establishes precedence for the interpretation of constitutional provisions pertaining to the division of national funds. This ruling has broad implications that could affect upcoming legislative and administrative reforms in financial management and governance at all governmental levels.
