The landmark judgment of the Supreme Court ordering the direct disbursement of federal allocations to local government councils has remained largely stalled across Nigeria. Investigations have revealed that despite a total allocation of 10.48 trillion naira to the third tier of government over the past two years, state governments have continued to maintain a firm grip on the funds. An analysis of Federation Account Allocation Committee reports, with data from the National Bureau of Statistics and the Office of the Accountant General of the Federation, indicates that local government councils were allocated ten point four seven nine trillion naira between the July 2024 and June 2026 meetings. This revenue corresponds to earnings generated between June 2024 and May 2026, which were systematically shared in the subsequent months.
This massive financial inflow occurred amid unresolved friction regarding the implementation of the Supreme Court ruling delivered on July 11, 2024. In the suit between the Attorney General of the Federation and the Attorney General of Abia State and thirty-five others, the apex court directed the Federal Government to bypass states and pay allocations directly into the accounts of the seven hundred and seventy-four local government areas. The court also prohibited state governments from withholding or spending council funds, while declaring the use of unelected caretaker committees to run local governments unconstitutional.
Two years after the historic ruling, the practical financial independence of local governments remains highly questionable. In many parts of the country, state joint local government accounts continue to function, leaving councils without direct control over their allocations. Although disbursements to local governments rose significantly in the second year following the judgment, there is little evidence of improved service delivery at the grassroots. Between July 2024 and June 2025, councils received four point four nine six trillion naira. This figure climbed to five point nine eight four trillion naira between July 2025 and June 2026, marking a thirty-three point one percent increase. This rise boosted the average monthly allocation from three hundred and seventy-four point six five billion naira in the first twelve months to four hundred and ninety-eight point six seven billion naira in the second year.
During the first twelve-month cycle, councils received three hundred and thirty-seven point zero two billion naira in July 2024, followed by monthly fluctuations before peaking at four hundred and thirty-four point five seven billion naira in February 2025 and closing at four hundred and nineteen point nine seven billion naira in June 2025. In the subsequent year, monthly allocations peaked at five hundred and forty point one five billion naira in May 2026 before ending at five hundred and thirty-four point two eight billion naira in June 2026.
The ongoing dispute centers on the State Joint Local Government Account created under Section 162 of the 1999 Constitution. Governors have long been accused by council officials, trade unions, and civil society groups of utilizing this system to deduct funds, dictate expenditures, and starve local councils of vital resources. The Supreme Court sought to eradicate this practice, but the slow execution of the judgment has kept the financial dynamics between states and councils unchanged in most regions. This lack of grassroots development was recently highlighted in the Oriire Local Government Area of Oyo State, where residents, following the release of kidnapped pupils and teachers, demanded basic infrastructure such as functional police stations, mobile networks, standard schools, and healthcare facilities, questioning the utilization of the massive federal allocations over the years.
During this twenty-four-month period, the Federation Account Allocation Committee distributed a total of forty-two point seven zero nine trillion naira among the three tiers of government. The Federal Government received fourteen point six two trillion naira, state governments received fourteen point five zero six trillion naira, local governments got ten point four eight trillion naira, and oil-producing states received three point one zero three trillion naira as thirteen percent derivation revenue. The allocations for all categories grew in the second year, with the federal share rising by forty-seven point three four percent and the states' share increasing by thirty-five point fourteen percent.
Despite these huge figures, representatives of the National Union of Local Government Employees and local government administrators have confirmed that financial autonomy exists only on paper. The National President of NULGE, Aliyu Kankara, stated that the Federal Government had yet to commence the direct payment of statutory allocations to councils. He said, "Up till now, they have not started the implementation of the financial autonomy. You know the allocation comes from the Federal Government, so they are the ones to commence the implementation,"
Kankara explained that the union had made several formal representations to the federal authorities without success. He said, "We have written several letters to them to remind them of the need to start paying local governments directly, but they haven’t done anything yet," He expressed deep concern that states are still receiving these funds, adding, "We are still hoping that they will do the needful, but up till now, states are still being paid the local government allocations," He further stressed, "Nothing has changed. Until the allocations go directly to the local governments as ordered by the Supreme Court, we cannot say financial autonomy has been implemented."
Although President Bola Tinubu set up an inter-ministerial committee to resolve administrative obstacles and facilitate direct payments, reports from states like Kaduna, Kano, Benue, Plateau, Sokoto, and Abia indicate that governors are still bypassing the directive. In Kaduna State, local governments continue to operate through joint accounts. A senior council official in the state, speaking on condition of anonymity, stated, "We are yet to receive allocations directly from the Federation Account as pronounced by the Supreme Court judgment granting local government autonomy,"
Another local government official from a North-West state explained that the actual funds reaching the councils are extremely small compared to official figures. The official said, "You will always hear huge amounts being allocated to local governments on paper, but in reality we are still at the beck and call of the state government. For instance, when you hear that a local government received about N800m, what eventually gets to the council may be as little as N50m released through the Ministry of Local Government and Chieftaincy Affairs." The source added, "From the money released to us, we pay the salaries of teachers and local government staff. We are still operating the joint account with the state government,"
The narrative is similar in Kano State, where a Government House source confirmed the continued use of joint accounts. The source said, "The Kano State Government still operates a joint account with the local governments in the state. No LGA is receiving its allocations directly from the Federal Government," The official explained the bureaucratic process involved, adding, "Any local government chairman who wants to carry out a certain project must write a request and forward to the government for approval of the funds needed for the execution of the project,"
In Benue State, an official of the Association of Local Governments of Nigeria dismissed claims of financial independence. The official noted that their attempts to establish independent accounts with the Central Bank of Nigeria were blocked by demands for authorization from the state. The official said, "They asked us to go and get letters from the state Accountant-General and my question is, who should direct the Accountant-General to issue the letter? Is it not the governor?" The source argued that the joint account remains a major hurdle, stating, "Joint account is constitutional. Unless the National Assembly amends the section of the law, it is then we will know that government is serious with granting autonomy to local government,"
The Benue State President of NULGE, Joshua Adiniya, also confirmed that joint accounts remain the operational model. Similarly, a senior ALGON official in Sokoto State lamented the lack of progress. The Sokoto official said, "We don’t have direct access to our funds yet. It is just on paper that we operate autonomy, while in the real sense, it’s still the same old pattern of operation," The official noted the fear of victimization among council leaders, stating, "It is going to be very difficult if you think anyone can be bold and address the media on such development. We just have to keep silent and watch as things unfold,"
In Plateau State, a senior official at the Jos North Local Government Council remarked, "We don’t have independent accounts because the joint accounts with the state government is still what they are using," In Abia State, councils have opened separate bank accounts, but state NULGE Secretary Andrew Okoro expressed doubt about actual direct payments, noting, "But it seems the status quo is being maintained," Okoro expressed regret over the persistent disregard for judicial rulings, stating, "This is not the first or second judgment, but all have not been complied with,"
The Abia State ALGON Chairman, Chinedu Ekeke, remarked that the burden of enforcing the ruling lies with the initiator of the lawsuit. Ekeke said, "There is a Supreme Court judgment from a suit filed by the Federal Government, which wanted to seek the interpretation. The onus is on the Federal Government to seek the clarification and to implement it,"
In contrast to the widespread defiance, Jigawa State stands out as an exception. The Jigawa ALGON Chairman, Sibu Abdullahi, confirmed that all twenty-seven councils in the state have achieved total financial autonomy. Abdullahi said, "Yes, our LGAs are now receiving allocations directly from the FG without any deductions at the state level," He pointed out that they have completely discarded the joint-account system, stating, "All 27 LGAs in Jigawa operate independent bank accounts. We are no longer on joint accounts with the state government,"
Abdullahi highlighted the positive impacts of the transition, stating, "Independent accounts have strengthened transparency and allowed us to respond faster to community needs," He added that the Jigawa model is being promoted elsewhere, noting, "We are sharing our model with other states. ALGON will also intensify advocacy, legal engagement and peer learning to ensure no LGA is left behind," He concluded, "The direct allocation and financial independence we now have in Jigawa will improve service delivery at the grassroots if we sustain accountability."
While Jigawa shows compliance, the general picture across the federation remains one of delayed implementation, leaving the financial independence of most local governments heavily compromised.
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