Local Government Autonomy: Disputes Arise Over Opening CBN Accounts

 Following the Supreme Court’s landmark judgment on July 11, 2024, affirming the financial autonomy of Nigeria’s 774 local government areas (LGAs), efforts have been underway to implement direct allocation of funds to LGAs.

The ruling declared unconstitutional the practice of state governors controlling local government funds and directed that allocations be paid directly into LGA accounts. In response, local governments across the country have initiated the process of opening accounts with the Central Bank of Nigeria (CBN) to receive these direct allocations. 

However, challenges have emerged in the implementation of this directive. The National Union of Local Government Employees (NULGE) has cautioned the CBN against colluding with state governors to undermine the financial autonomy of LGAs. NULGE’s National President, Hakeem Ambali, emphasized that no local government lacks at least three years of audited financial records and urged the CBN to issue a formal directive on the requirements for opening accounts. 

Despite these assurances, reports indicate that some governors have continued to manage LGA funds, leading to delays in the disbursement of allocations. This ongoing impasse has prompted calls for the federal government to enforce the Supreme Court’s decision and ensure that local governments receive their due allocations without state interference.