New Telegraph

Alleviating Poverty: Time to Trigger Local Govt Financial Autonomy

Nigerians are battling hardship and poverty, a consequence of misappropriation of resources by people in position of authorithy. To curtail the trend, granting financial autonomy to the 774 local government councils, by freeing them from the grip of state governors, has become inevitable, Abdulwahab Isa reports

The current administration is juggling options to stave off delicate economic challenges rooted in years of maladministration of resources. By a simple rule of thumb, good governance ought to trickle top down– from the central to the sub- national (state), extending down to the last layer in the governance structure, the local government councils. Local government council is the closest by proximity to the masses with a base at the grassroot. The current economic challenges, hardship and poverty, are more severe and pervasive at the local level than the other two layers of the government. While the states are entirely independent of the Federal Gov- ernment, getting their share of allocation from the federation purse untouched, local government councils are denied financial freedom by the states. The 1976 local government reforms envisaged transformative development across the local government councils.

The reform, which was at the behest of the military regime of the time, was meant to make the third tier of the government truly independent, a sort of micro government in the true sense of it, and not meant to be subjected to the whims and caprices of any other government. The local government was structured the same way state governments are autonomous of the federal government. The clipping of local government councils by states is a rea- son for pervasive poverty, insecurity and social disorder being experienced in the country.

LGs as financial apron to states

The Federation Account Allocation Committee (FAAC) is custodian of revenue of three tires of government comprising federal, states and local government councils. FAAC meets monthly to consider revenue inflow to the federation purse. It allocates the revenue so harvested in accordance with the revenue formula. The formula allocates 52.68 per cent of the revenue to the federal government, 26.72 per cent to states and 20.60 per cent goes to the local government. Regretfully, the creation of State and Local Government Joint Account (SLGJA), a provision of the 1999 Constitution, inadvertently set local government for state government grab. SLGJA entails pooling all the financial allocations due to the various local government councils from the federation account, for onward distribution by the states. By intention, SLGJA is to ensure that the state government effectively controls and monitors expenditure by the execu- tives of the local government councils, and to ensure that the funds are properly utilised for purposes of effective grassroots service delivery. However, SLGJA turns out to be a harbinger of local government councils. It lays the path to local government financial crippling by state government. It puts local government councils’ monthly allocation under state control.

LGs’ FAAC allocation outlook

Had the state government not tinkered with the local government monthly allocation in the guise of enforcing Local Government Joint Account (SLGJA) mandate, the local government councils would have had reasonable funds to execute developmental projects at the grassroot. According to FAAC disbursement data, 774 Local Government Councils in the federation received about N2.4 trillion as statutory revenue from January 2023 to January 2024. Of the amount, N1.4 trillion was shared under the current administration of President Bola Ahmed Tinubu (June,2023 to January 2023) while the latter was disbursed under the previous government of former president Muhammadu Buhari. In January 2023, the sum of N288.92 billion was shared as statutory revenue to the 774 Local Government Councils by FAAC, it was N173.936 billion in February, N171.257 billion in March; April N160.60 billion, May allocation was N195.541 billion while the sum of N218.06 billion was shared with the Councils as a June allocation.

Similarly, the July FAAC allocation to the Councils was N229.409 billion, August N266.538 billion, September NN74.62 billion, October N57.707bn; November N68.396 billion, December N258.810 billion while the sum of N288.9 billion was shared in January, 2024. To tighten their grip on local government structure, majority of state governors preferred administering local government affairs with caretaker chairmen in place of democratically elected ones. A Supreme Court verdict disapproving state governors’ control of local government councils and pronouncement of National Assembly urging state governors to free local government has not been respected.

Financiall autonomy councils Analysts and experts, who spoke with this medium, were of the opinion that for economic growth, prosperous living to permeate among the poorest Nigeria mass, local government as a closest to the people at the grassroot must be granted both financial and leadership autonomy. The Chairman, Arewa Economic Forum’ Mallam Ibrahim Shehu Dandaka, alluded to this assertion during an interview with New Telegraph last week. “An executive order was signed by the previous President, and I think the Nigerian governors’ forum took presidency to the Supreme Court to have that quashed on the issue of fiscal autonomy for the local government. “I think the issue of fiscal autonomy for the local government is something that the National Assembly should work towards because what the governors are using is the fact that the constitution gives them the right to operate joint account and until that law is reversed, there is nothing anybody can do about that.

“An economist, Dr. Aliyu Ilias said the huge allocation shared to three tires of government without significant development shows failure of governance. “It’s true that the government now gets more FAAC sharing but of no impact. If you share more money and the money does not have a value, it becomes a problem. “Governors should allow the local governments to be independent. Granting Local government autonomy is very crucial and important for economic development. If there must be economic development in Nigeria, it has to start from the local government. “State governors are doing what they think and not what local government needs. Governors come to Abuja every month for FAAC allocation without developing a robust mechanism for Internally Generated Revenue IGR,” he said.

Last line

To stave off the current tide of hardship, poverty sandwiching mass citizens of Nigeria, govern- ment must free encumbrances that tie local government councils to state governors.

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