Local councils to receive direct FAAC allocations from January 2025

Starting January 2025, local councils in Nigeria will begin receiving direct allocations from the Federation Account, in line with the Supreme Court’s July 11 ruling granting financial autonomy to local governments.

The disbursement of this month’s allocation will kick off the new system, ensuring that councils receive their funds directly without interference from state governments, as per The Nation.

This decision aims to eliminate delays in implementing the ruling and ensure timely access to resources for local governments.

The Supreme Court’s judgment dismantled the state/local government joint account, which has traditionally been used to channel council allocations.

However, the transition has met resistance from state governors, who are dissatisfied with the ruling.

“A few LGAs have already started receiving their direct allocations but all of the 774 LGAs will fully start receiving their allocations from January 2025,” revealed a member of the Inter-Ministerial Committee set up to enforce the ruling.

The source further stated: “Our committee will reconvene in January to review its progress and finalise measures before the Accountant-General of the Federation issues authorisation for the complete rollout. This is a critical juncture in Nigeria’s governance structure.”

In the same meeting, the committee plans to address actions by governors attempting to undermine the autonomy of elected LGA leaders, ensuring they are not pressured into serving state interests.

This move is seen as a key step in empowering local councils to perform their constitutional duties without undue external influence. However, concerns about state interference remain, particularly in Edo State, where the House of Assembly recently suspended democratically elected local government leaders over alleged insubordination by Governor Monday Okpebholo.

The Inter-Ministerial Committee, chaired by George Akume, the secretary to the government of the federation, also includes key figures such as Wale Edun, coordinating minister of the economy, Lateef Fagbemi, attorney-general of the federation, Abubakar Bagudu, the minister of budget and economic planning, Oluwatoyin Madein, the accountant-general, Olayemi Cardoso, the Central Bank governor, and Muhammed Shehu, the chairman of the Revenue Mobilisation Allocation and Fiscal Commission, as well as representatives from state governors and local governments.

President Bola Ahmed Tinubu has strongly supported local government financial autonomy, emphasising the need to implement constitutional provisions recognising councils as a third tier of government.

Many states have conducted local government elections since the Supreme Court verdict in July.

However, some states, such as Anambra, appear to be attempting to circumvent the ruling. The Anambra State House of Assembly recently passed a Local Government Administration Bill that mandates councils to deposit a portion of their allocations into a state-controlled joint account, raising concerns about compliance with the Supreme Court’s decision.