HeadlineBREAKING: Pay Allocation To Local Government Directly From Federation Account – Supreme...

BREAKING: Pay Allocation To Local Government Directly From Federation Account – Supreme Court Rules

July 11, (THEWILL) – The Supreme Court has directed that Local Governments’ allocations from the Federation Account should be paid directly to them henceforth.

A seven-member panel of the apex court, led by Justice Mohammed Lawal Garba, declared unconstitutional the act by state governors to hold funds meant for Local Government (LG) administrations. It declared the act a clear violation of Section 162 of the 1999 Constitution, as amended.

In the lead judgement read on Thursday, by Justice Emmanuel Agim, the court barred the 36 governors of the federation from further retaining or utilising funds that are meant for the 774 Local Government Areas (LGAs) in the country.

Justice Agim held that no House of Assembly of any state has the power to make laws that could, in any manner, interfere with monies meant for the LGAs.

“Demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay LGA allocations to the LGAs directly or pay them through the states. In this case, since paying them through states has not worked, justice of this case demands that LGA allocations from the federation account should henceforth be paid directly to the LGAs,” the apex court held.

The court further declared unconstitutional the appointment of caretaker committees by governors to run the affairs of the LGAs. It held that the 36 states are under obligation to ensure democratic governance at the third tier of government.

It dismissed the preliminary objection by the state governors, contending the right of the Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, to file the suit.

THEWILL reports that the judgment follows a suit marked SC/CV/343/2024, filed on May 20, by the AGF on behalf of the Federal Government.

Seeking full autonomy for the 774 local governments in Nigeria, the AGF prayed the apex court for an order of injunction restraining the governors, their agents and privies from receiving, spending or tampering with funds released from the federation account for the benefits of local governments when no democratically elected local government system is put in place in the states.

The AGF prayed the court for an order permitting the funds standing in the credits of local governments to be directly channelled to them from the federation account in line with the provisions of the Constitution.

The Federal Government further prayed for an order restraining governors from constituting caretaker committees to run the affairs of local governments as against the Constitutionally recognised and guaranteed democratic system.

Consequently, it prayed the court for an order restraining the state governors from unilateral, arbitrary, and unlawful dissolution of democratically elected officials of local governments.

“invoke sections 1, 4, 5, 7 and 14 of the Constitution to declare that the State Governors and State Houses of Assembly are under obligation to ensure a democratic system at the third tier of government in Nigeria and to also invoke the same sections to hold that the governors cannot lawfully dissolve democratically elected local government councils.

“Invoke of sections 1, 4, 5, 7 and 14 of the Constitution to declare that dissolution of democratically elected local government Councils by the Governors or anyone using the state powers derivable from laws enacted by the State Houses of Assembly or any Executive Order, is unlawful, unconstitutional, null and void,” the suit prayed.

It argued that “Nigeria, as a federation, was a creation of the 1999 Constitution, as amended, with the President, as Head of the Federal Executive Arm, swearing on oath to uphold and give effect to provisions of the Constitution.

“That the governors represent the component states of the Federation with Executive Governors who have also sworn to uphold the Constitution and to at all times, give effect to the Constitution and that the Constitution, being the supreme law, has binding force all over the Federation of Nigeria.

“That the Constitution of Nigeria recognises federal, state and local governments as three tiers of government and that the three recognised tiers of government draw funds for their operation and functioning from the Federation Account created by the Constitution.

“That by the provisions of the Constitution, there must be a democratically elected local government system and that the Constitution has not made provisions for any other systems of governance at the local government level other than democratically elected local government system.

“That, in the face of the clear provisions of the Constitution, the governors have failed and refused to put in place a democratically elected local government system even where no state of emergency has been declared to warrant the suspension of democratic institutions in the state.

“That the failure of the governors to put a democratically elected local government system in place is a deliberate subversion of the 1999 Constitution, which they and the President have sworn to uphold.

“That all efforts to make the governors comply with the dictates of the 1999 Constitution in terms of putting in place, a democratically elected local government system, has not yielded any result and that to continue to disburse funds from the Federation Account to governors for non existing democratically elected local government is to undermine the sanctity of the 1999 Constitution.

“That in the face of the violations of the 1999 Constitution, the Federal Government is not obligated under section 162 of the Constitution to pay any State funds standing to the credit of local governments where no democratically elected local government is in place.”

However, in separate preliminary objections filed before the apex court, the States sought the dismissal of the suit with substantial cost.

They contended that the AGF, who initiated the action on behalf of the Federal Government, lacked the locus standi (legal right) to do so and further alleged that the AGF breached their right to a fair hearing when he failed to serve them with a copy of a further affidavit he filed in support of the suit.



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