As Nigeria’s 774 local government areas (LGs) prepare to begin receiving direct funding from the Federal Government, concerns have emerged about the ability of local council chairmen and existing institutional frameworks to ensure accountability and transparency.
These issues are exacerbated by a lack of democratic oversight at the local level, where corruption, abuse of power, and a loss of public trust in governance have been persistent challenges.
Historically, state governments have controlled local government affairs, with many councils performing limited functions.
Governance structures, such as legislative bodies, are often non-operational, further undermining the effectiveness of local councils.
Additionally, there are worries about the local governments’ ability to implement state-wide minimum wage policies due to poor revenue generation, weak economic activity, and inadequate infrastructure in many areas.
Some fear a return to the pre-1999 period, when local governments struggled to pay salaries for essential workers like primary school teachers and health center staff.
An investigation by The Guardian revealed that unless local government laws and regulations are amended in accordance with the Supreme Court’s ruling granting financial autonomy, state governors and political figures will continue to control the finances of the councils.
Currently, state houses of assembly oversee the operations of local governments, but their regulations are largely dictated by governors through state ministries.
These ministries control procurement rules, set spending limits, and manage council funds, often limiting the autonomy of council chairmen and councillors.
Former Ijebu East Local Government Chairman, Wale Adedayo said only Lagos State has begun updating its local government administrative laws to address current challenges in financial management.
He urged other states to follow this example and align their laws with the Supreme Court ruling.
In order to prevent a repeat of past financial crises, Adedayo called for the Federal Government to instruct the Central Bank of Nigeria (CBN) to prioritize the payment of salaries and pensions for local government workers, particularly in education and health, ensuring that funds are deposited into separate accounts for transparency.
At the same time, the National Assembly faces the challenge of amending the Constitution to remove Section 162(6), which governs the states/local government joint account (JAAC), in order to fully implement the Supreme Court’s ruling on financial autonomy.
However, there has been little action on this front, with both the Presidency and state governors hesitant to agree on how the ruling will be executed.
In 2023, the Federation Account Allocation Committee (FAAC) paid N3.774 trillion into the JAAC, which is controlled by state governors, while local governments received N9.56 trillion between 2019 and 2023.
Financial management expert and former Ogun State Finance Commissioner, Kehinde Shogunle, emphasized the need for clear federal guidelines to ensure that local government expenditures are transparent and accountable.
He pointed out that for years, local governments have struggled with poor allocations and the overwhelming control of state governors.
Shogunle stressed that local councils lack the political and administrative capacity to manage large amounts of funds and to ensure accountability without proper oversight.
Professor Remi Aiyede from the University of Ibadan warned that without sufficient oversight, local government autonomy could result in “decentralized corruption.”
He called for stronger internal systems within local councils and for anti-corruption agencies to take a more active role in monitoring local government activities.
Despite these concerns, former President of the Association of Local Governments of Nigeria (ALGON), Kolade Alabi, dismissed claims that local government chairmen are not capable of managing funds and ensuring transparency.
Alabi argued that the new financial autonomy would lead to significant development at the grassroots level, benefiting communities across the country.
He assured Nigerians that mechanisms are in place to monitor local government expenditures, and any chairmen found misappropriating funds would face legal consequences.
In a similar vein, former ALGON Chairman in Oyo State, Abbas Aleshinloye, argued that governors should no longer impose limits on local government spending, as this unnecessarily ties the councils to state control.
He stressed that local governments must have the freedom to manage their funds autonomously.
Adedayo, who previously chaired Ijebu East Local Government, explained that the administrative framework at the state level is mirrored in local governments, where a treasurer, head of local government administration, and auditor general are responsible for overseeing financial management.
He assured that councillors have the necessary training to approve and monitor budgets effectively.
However, there has been little visible progress on the part of the National Assembly to implement the Supreme Court’s judgment on local government autonomy.
Despite Senate President Godswill Akpabio’s commitment to removing Section 162(6) of the Constitution, which enforces the JAAC system, no concrete legislative action has been taken.
State governors, however, continue to resist full implementation of the ruling. Governor Chukwuma Soludo of Anambra State, for instance, signed a new law establishing a State Joint Local Government Account, despite criticism from civil society groups.
Soludo defended the law, arguing that granting full autonomy to local governments could lead to instability and hinder development.
He insisted that the new legislation aligns with the Supreme Court ruling and is intended to facilitate its implementation rather than undermine it.
On the federal level, representatives such as Mark Esset from Akwa Ibom State have expressed doubts about the Supreme Court’s ruling, arguing that the states should retain some oversight over local governments, as mandated by the Constitution.
Esset contended that the ruling does not provide full autonomy to local governments, given that state assemblies are constitutionally tasked with overseeing their operations.
Political scientist, Professor Gbade Ojo emphasized that local government officials are capable of managing funds, suggesting that anti-corruption agencies should focus on overseeing the use of public resources.
He also pointed to informal mechanisms in some states that help safeguard funds for local government workers, particularly pensioners and teachers.
Prof. Akeem Amodu, a former head of the Political Science Department at Lead City University, also called for state auditors and public accounts committees to monitor local government finances closely.
He urged the use of digital tools and systems, such as e-budgeting and automated payment platforms, to ensure transparency in fund allocation.
Dr. Damilola Agbalajobi from Obafemi Awolowo University emphasized the importance of punitive measures for any council chairmen who mismanage funds, calling for public disgrace and repayment of misused funds.
She also stressed the need for citizens’ participation in local government administration, ensuring that local councils are held accountable to the people they serve.
As Nigeria moves toward implementing local government financial autonomy, the challenge will be ensuring that the new system leads to greater development and transparency at the grassroots level.
