The Federal Government and state governors have agreed to a three-month moratorium on the implementation of the Supreme Court's ruling granting financial autonomy to local governments.
This means that local governments may have to wait until October before the direct payment of allocations into their respective accounts can begin.
The Supreme Court, in a landmark judgment delivered on July 11, 2024, affirmed the financial autonomy of the 774 local government areas in Nigeria.
The apex court ruled that state governors can no longer control funds meant for the counc1ils and directed the Accountant-General of the Federation to pay LG allocations directly to their accounts, declaring the non-remittance of funds by the 36 states unconstitutional.
The moratorium agreed upon by the Federal Government and governors is due to concerns over the impact of the autonomy on salary payments and operational viability of local governments.
In 2019, under former President Muhammadu Buhari, the Nigerian Financial Intelligence Unit issued a regulation that banned transactions on State and Local Governments Joint Accounts and sent funds directly to the accounts of the local governments.
However, the Nigerian Governors' Forum opposed this regulation and the NFIU eventually capitulated.
The status quo was maintained until May 2024 when the Attorney-General of the Federation, Lateef Fagbemi (SAN), filed a suit at the Supreme Court to strengthen the autonomy of local government areas as guaranteed by the constitution.
The suit sought to prevent state governors from dissolving democratically elected local government councils and establishing caretaker committees, which violate constitutional provisions.
The Supreme Court heard the case on June 13, with state governments, through their respective attorneys-general, opposing the suit.
However, in its judgment on July 11, 2024, the seven-member panel of the apex court upheld the suit brought by the federal government to strengthen the independence of local governments.
