August 09, (THEWILL) — Two years after the Supreme Court ordered that Federation Account allocations due to Nigeria’s 774 local government councils be paid directly to them, the financial autonomy granted by the judgment has yet to be fully implemented.
The Supreme Court delivered its landmark judgment on July 11, 2024, ordering the Federal Government to pay allocations standing to the credit of local governments directly into their accounts. The court also held that state governments could not retain or spend funds allocated to the councils.
Since the judgment, however, billions of naira have continued to be allocated to the local-government tier through the Federation Account Allocation Committee, while the direct-payment arrangement envisaged by the court remains largely unimplemented.
An analysis of FAAC reports using data from the National Bureau of Statistics and the Office of the Accountant-General of the Federation put the total allocation to local governments at N10.479 trillion between the July 2024 and June 2026 FAAC meetings.
The figure needs to be understood correctly. It represents the amount allocated to the local-government tier by FAAC, not proof that 10.479 trillion was transferred directly into the individual accounts of the 774 councils.
Before the judgment, local governments already had a constitutional share of Federation Account revenue. The July 2024 ruling did not create that entitlement.
What the court sought to change was the route through which the money reached the councils.
The long-standing arrangement involved allocations being paid through the State Joint Local Government Account system, with state governments playing a role in the management and distribution of funds.
The Supreme Court found that the arrangement had been abused and ordered the Federal Government to pay allocations due to the councils directly.
The judgment therefore established a simple principle: money standing to the credit of a local government should reach that local government directly rather than being retained or spent by a state government.
The scale of the funds involved has increased considerably since the judgment.
According to the FAAC analysis, local government allocations rose from about N4.496 trillion in the first 12 months covered by the review to approximately N5.984 trillion in the second year. That represents an increase of about N1.488 trillion, or 33.1 percent, between the two periods.
The analysis covers the July 2024 to June 2026 FAAC meetings. Because FAAC distributes revenue earned in the preceding month, the period effectively covers revenue generated from June 2024 to May 2026.
This distinction is important because the July 2024 FAAC meeting dealt with June revenue, while the June 2026 meeting distributed revenue generated in May 2026.
The allocations to the local-government tier accounted for about 24.54 percent of N42.709 trillion shared among the Federal Government, states, local governments and oil-producing states as derivation during the 24-month period.
Despite the size of the allocations, the central question remains whether the money is actually being transferred directly to the councils as ordered by the Supreme Court.
The latest findings indicate that this has not happened nationwide.
The National President of the Nigeria Union of Local Government Employees, Aliyu Kankara, in July 2026, said that little had changed since the Supreme Court ruling and that direct payments from the Federal Government to local governments had not commenced.
This means the issue is not whether local governments have been assigned money through FAAC. They have. The unresolved issue is whether the payment mechanism has been changed in accordance with the Supreme Court’s directive.
The Federal Government moved after the judgment to establish a system through which the councils could receive their allocations directly.
The Central Bank of Nigeria was directed to facilitate the opening of dedicated accounts for the 774 local government councils to enable direct disbursement of Federation Account allocations. The Association of Local Governments of Nigeria also said in January 2025 that the councils were expected to open dedicated CBN accounts for the purpose.
But the existence of an account-opening plan did not automatically translate into direct payments.
Reports have continued to show that councils in several states were still operating through state-level joint allocation mechanisms rather than receiving their Federation Account allocations directly from the Federal Government. A January 2026 investigation, for example, found that the implementation remained uneven across states, with councils in some states still operating through Joint Allocation Accounts Committees.
The amount at stake has become even larger as government revenue distributions have increased.
For June 2026 revenue, FAAC shared N2.551 trillion among the Federal Government, the 36 states and the 774 local governments. Of this, local governments received N591.39 billion, comprising N332.136 billion from statutory revenue and N259.254 billion from VAT. The June figure illustrates why the implementation question matters financially.
More than half a trillion naira was assigned to the local-government tier in a single month. Under the Supreme Court’s ruling, the relevant question is not simply how much FAAC allocated to the councils, but whether the councils themselves had direct access to those funds.
The Supreme Court judgment was intended to give local governments greater control over their finances and reduce the ability of state governments to retain or manage funds meant for councils.
Two years later, FAAC has continued to allocate substantial sums to the third tier of government, with the total reaching approximately N10.48 trillion over the July 2024-June 2026 FAAC meeting period.
But the evidence does not show that the Supreme Court-ordered direct-payment mechanism has been implemented nationwide. That leaves Nigeria with a clear gap between financial entitlement and financial autonomy.
The councils continue to have an established share of Federation Account revenue. FAAC continues to determine and announce those allocations. What remains unresolved is the final step: ensuring that the funds are transferred directly to the local government councils in accordance with the Supreme Court’s July 11, 2024 judgment.
Until that happens, the N10.48 trillion allocated since the ruling is less a measure of how much financial autonomy local governments have gained than a measure of the enormous amount of public revenue involved in the unresolved implementation of the court’s order.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
