The Federal Government has reaffirmed its determination to put an end to long standing interference by state governments in funds allocated to the 774 local government areas from the Federation Account.
The commitment was restated on Thursday in Abuja by the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Mohammed Shehu, during the 2025 budget performance appraisal and the 2026 budget defence organised by the House of Representatives Committee on Finance.
Shehu expressed concern over the continued encroachment by state governments on local government finances, stressing that the commission is prepared to take decisive measures to guarantee financial autonomy at the grassroots level.
He disclosed plans to re establish a Local Government Committee within the commission to monitor the operations and finances of all local governments across the country.
According to him, the lack of functional local governments has contributed significantly to the challenges facing the nation, noting that even under military rule, local councils performed better than they do today.
Shehu revealed that President Bola Tinubu had personally engaged state governors on the matter, warning that an executive order would be issued if local government autonomy is not respected. He said the commission fully supports the President’s position.
The RMAFC Chairman also commended the House Committee on Finance for its support, stating that the committee’s guidance has strengthened the commission’s credibility among key government institutions.
He noted that revenue generating agencies now engage more openly with the commission, adding that long standing issues with agencies such as the Nigerian Customs Service and the Nigerian Upstream Petroleum Regulatory Commission are gradually being resolved.
Speaking on achievements recorded with the backing of the committee, Shehu disclosed that the commission recently conducted an audit of oil assets across the Niger Delta region.
He also informed lawmakers that work on a new revenue allocation formula for the three tiers of government, as well as remuneration for political office holders, was nearing completion.
According to him, analysis of the relevant data is almost concluded and the proposal would soon be presented to the National Assembly for consideration.
Shehu further revealed that the review of remuneration for political office holders has been completed and forwarded to the President through the Secretary to the Government of the Federation.
He expressed optimism that the proposal would soon be transmitted to the legislature to become law, noting that certain categories such as ministers do not require legislative approval.
After the presentation of the 2025 budget performance and the 2026 budget defence, the Chairman of the House Committee on Finance, Abiodun Faleke, commended the management of RMAFC for its role in strengthening revenue generation in the country.
Interference in local government finances has remained a contentious issue within Nigeria’s federal system for decades. Although the 1999 Constitution recognises local government administration, allocations have often been controlled by state governments through the State Local Government Joint Account system.
In practice, this arrangement has enabled many states to withhold or redirect funds meant for local councils, weakening service delivery and governance at the grassroots.
Successive administrations, labour unions, and civil society organisations have linked the erosion of local government autonomy to poor rural development, failing primary healthcare and education systems, and the overall decline of local governance structures.
Recent Supreme Court rulings and renewed pressure from the Federal Government have brought the issue back into focus, with authorities signalling a tougher stance, including possible executive action, to enforce financial independence for local councils across the country.
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