When the Supreme Court affirmed the financial autonomy of Nigeria’s 774 local governments, many celebrated the decision while some criticised it, describing it as ‘mere distraction’ compared to the more serious problems of inflation and poverty.

In the judgment of the seven-member panel, the Supreme Court unanimously upheld the suit brought by the Federal Government to strengthen the independence of local governments in the country.

New Telegraph explores the probable implications of this judgment on the economic wellbeing of Nigerians.

LGAs

The local government is Nigeria’s third tier of government, the level of government closest to the grassroots. But for over two decades, local governments have been almost crippled in most states, where the governors seize their federal allocations and only release funds to them in piecemeal to barely keep them going.

In the states, governors withhold local government funds in the controversial joint accounts that they supposedly operate jointly with the local governments.

However, the umbrella body of all local government chairpersons across the country has said most members do not have access to the controversial accounts in their states.

The governors’ control includes arbitrary dissolution of elected local government executives, despite repeated court decisions judging such an action as illegal. The lack of independence of the local governments also stems from governors overbearing influence on other subnational institutions, such as the states’ independent electoral commissions.

FG’s case

The Attorney-General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi SAN, filed the suit in May, 2024. The panel of seven justices of the court led by Garba Lawal, heard the suit on June 13 and reserved judgment.

It sought to prevent state governors from unilaterally dissolving democratically elected local government councils and establishing caretaker committees, actions that violate constitutional provisions.

The AGF argued that the constitution mandates a democratically elected local government system and does not allow alternative governance structures.

The suit also prayed that the funds from the Federation Account be channelled directly to local governments, bypassing the allegedly unlawful joint accounts managed by state governors.

It also sought an injunction to stop governors and their agents from receiving or spending local government funds without a democratically elected local government system in place.

Furthermore, it contended that the governors’ failure to establish such a system constitutes a deliberate subversion of the 1999 Constitution.

The Supreme Court heard parties to the case on 13 June, with the state governments, through their respective Attorneys-General, opposing the suit.

It should be noted that the immediate past administration of then President Muhammadu Buhari tried to enforce the financial autonomy of local governments through an Executive Order but the order fell apart due to the governors’ objection to it.

The court held that the 36 states must ensure democratic governance at the local government level. One of the other far-reaching decisions of the Supreme Court is the declaration of the appointment of caretaker committees to replace elected local government executives.

Johnson Usman, who represented the Attorney-General of the Federation (AGF), praised the Supreme Court’s decision on this level. According to him, “The judgment delivered by the Supreme Court has finally put to rest the issue of local governments’ financial autonomy.”

He applauded the court’s declaration that joint accounts supposedly run by the state and local governments are not mandatory and are not the only way local governments can receive their federal allocations. He said the Federal Government would begin to pay funds directly into local government accounts, ensuring compliance with the judgement.

Constitutional provisions

The member of the Supreme Court panel, Emmanuel Agim, who delivered the apex court’s judgement, however, held that local governments across the country should receive their allocations directly from the AccountantGeneral of the Federation.

He ruled that it is illegal and unconstitutional for governors to receive and withhold funds allocated to local government areas (LGAs) in their states. He noted that ordinarily, the Nigerian constitution permits the federal government to pay local government allocations directly to them or through the state governments.

However, he said, “Demand of justice requires a progressive interpretation of the law. “It is the position of this court that the federation can pay local governments allocations directly to the local governments or through the states.

In this case, since paying them through the states has not worked, justice demands that local governments’ allocations from the federation account should henceforth be paid directly to the local governments.

“I hold that the states’ retention of local government funds is unconstitutional.” He then ordered that “the amount standing to the credit of local government councils must be paid by the Federation Account to the local government councils and not by any other person or body.”

He added, “An order of injunction is hereby granted restraining the defendants from collecting funds belonging to the local government councils when no democratically elected local government councils are in place.

“An order that henceforth, no state government should be paid monies standing to the credit of the local government councils.”

The new arrangement ordered by the Supreme Court empowers the Accountant-General of the Federation to bypass the state governments in the monthly disbursement of federal allocations to the local governments.

Nigerians’ wellbeing

However, Oyo State Governor, Seyi Makinde, who was one of the earliest responders to the Supreme Court judgment, urged a focus on productivity and addressing hunger and national growth rather than local governments’ autonomy.

Makinde described the Supreme Court’s judgment on local governments’ financial autonomy as a distraction, saying the country must face the real issues.

The Supreme Court had declared that it is unconstitutional for state governors to hold funds allocated for local government administration.

The court further declared that a state government has no power to appoint a caretaker committee, declaring that a local government council is only recognisable with a democratically elected government.

Apart from calling the judgment a distraction, Makinde, also called on other governors to focus on productivity rather than being distracted by the judgment.

According to the governor, “I think it’s just a distraction. We must face the real issues that we have, and the issue that we have is that we are not producing enough; we are not productive.

“Whatever it is we are sharing in Abuja, which is what this FAAC is all about or whatever is in Abuja, share it with the local governments. Is that our problem?

“Maybe it is a part of the problem, but yes, you want to have value for what you want to share, but our real problem is productivity. “But now this is going to be the discussion for next month when the issue of hunger and anger in the land will still be under the table; it’s a big issue.

“The Federal Government is saying we have to import food; it’s a big shame; it’s a big shame on this country that we cannot feed ourselves.” Makinde further noted, “We are saying we should go back to those things that will allow us to bring confidence back to our people, and to ensure that this country is back on the path of growth and progress.’’

Afenifere

Also reacting to the judgment, Afenifere, a Yoruba socio-cultural group, in a statement issued by its leader and the National Public Secretary, Chief Ayo Adebanjo, and Prince Justice Faloye, respectively, described the apex court’s judgment as a mere judicial conspiracy, saying it was a judicial conspiracy against true federalism and democracy.

In the statement titled: Tinubu and the grand conspiracy against democracy and true federalism in Nigeria, the group said the judgment was against the principle of true federalism. It added that the Supreme Court had played to the gallery in delivering such a judgment.

The statement reads in part, “Afenifere views the judgment of the Supreme Court in the case filed by the Federal Government on the so-called local government autonomy as a sheer judicial conspiracy in cahoots with the Tinubu’s administration against the Nigerian state and its foundational principles of federalism.

“Rather than interpret the constitution to uphold its elementary but overriding federal principle, which recognises only a two-tier federal structure of the central government and federating states, the Supreme Court played to the gallery and wittingly allowed itself a most retrogressive declaration that the power of the government is portioned into three arms of government, the federal, the state and the local government.

“For the avoidance of any doubt, Afenifere makes bold to say that in line with its negotiated basis of existence, Nigeria is a ‘Federation consisting of states and a Federal Capital Territory’ as affirmed by Section 2 (2) of the 1999 Constitution.

While Afenifere frowns at corruption and misuse of public funds at levels of government, it condemns in most unmistaken terms the subjugation of the states and their constitutional roles including the local government system to the whims and caprices of the federal government by any means including obvious manipulation of the Federation Account as in the present case.”

The group also alleged that the administration of Tinubu had been practicing a unitary system in some of its policies since its inception.It maintained that the only way forward for the country was to practice true federalism.

Restructuring

Noting, “It is becoming stridently eloquent that with just over a year of its inauguration, the Tinubu government, more than even the military administrations, is uncannily determined to unitarise the Nigerian federation.

“Afenifere insists that the way forward for Nigeria is not the confusing rudderless tinkering but a holistic restructuring of the polity to re-enact the fundamental principles of true federalism as agreed by the founding fathers.

“This includes the fact that the local government system is an exclusive preserve of the states, either by direct constitutional provisions or residual powers in a federation.”

Legal Practitioners

Speaking with the New Telegraph in an interview, a legal practitioner, Aliyu Ajibade, noted the Supreme Court is the final authority on matters of law. According to him, true federalism must serve the Nigerian people.

Ajibade said, “Local governments in Nigeria have become moribund. They have become merely ceremonial. Most of them only exist to pay salaries to their staff. This is not acceptable and a complete negation of the principles of federalism and democracy.”

Also, speaking with the New Telegraph, Matthew Ibadin, a security expert and Chief Executive Officer of Badinson Security Services at Victoria Island Lagos, applauded the Supreme Court judgment, affirming that local government funds should be paid directly to them.

According to him, the judgment delivered by Justice Emmanuel Agim is a landmark judgment and a significant step towards fostering development, security, and infrastructure improvement across Nigeria.

Ibadin further described the ruling as, “an achievement worthy of celebration, especially as we mark the President’s one year in office. This decision is a birthday gift to all Nigerians, as it will accelerate development at the grassroots level.”

He lamented the previous situation where local governments were unable to initiate and execute projects due to financial constraints.

“It is a shame that before now, local governments could not undertake any project to improve their communities; all they could do was issue marriage certificates, birth certificates and death certificates.

This judgment will change that narrative and empower local governments to take charge of their development agenda,” he said. Ibadin also criticised the practice of governors removing local government chairmen from office, calling it an aberration of the constitution.

“Just as it is unconstitutional for the President to remove a democratically elected Governor from office, the same principle should apply to local government chairmen,” Ibadin added.

This is as he highlighted the importance of local governments regaining control over primary schools. “Local governments should have the authority to manage primary education within their jurisdictions.

This will ensure that educational policies and programmes are aligned with the specific needs of local communities, thereby improving the quality of education for our children.”

The legal practitioner also advocated for the adoption of true federalism, where state governments are allowed to formulate and translate policies tailored to their own needs.

“As the nation celebrates this landmark judgment, the focus now should shift to implementing these changes and ensuring that

local governments are adequately equipped to fulfil their new responsibilities,’’ he disclosed. Adding, “In doing so, we must respect the rule of law, which is the foundation of our democracy and the key to sustainable development and security in our nation.”

Council elections

One of the outcomes of this judgment is the fact that it has now ignited calls by Nigerians for the transfer of the responsibility of conducting local government elections to the Independent National Electoral Commission (INEC) in order to reflect fully the true spirit of the judgment and federalism in the country.

Mr Shesan Bababusola, a businessman in an Interview with the New Telegraph said, “The Supreme Court judgment is a step in the right direction because the local governments, apart from traditional rulers are closest to the Nigerian people.

“They know need of the communities in their domain therefore they can quickly attend to them before the state governments. The local governments are so important because they are also more accessible to the people.

“It is easier for me to see my local government chairman than to see the Governor or the president when there is a problem, therefore, governments’ interventions will be more effective.

I want to congratulate Mr President and the Supreme Court and especially the Nigerian people for this achievements. I will also call on the Federal Government and the state governments to ensure that this judgment is implemented and effective.”

Bababusola also noted that those who condemn the Supreme Court judgment are not sincere, as he questioned if the previous system in which the local governments were rendered useless effective?

Answering in the negative, he therefore, said, ‘‘so, if a system is not effective, we should continue with it? That would be counterproductive. Most of the problems we complain about such as poverty, high costs of food items, lack of productivity, insecurity can be tackled if the local governments are well funded and effective.’’

Festus Akinola, an Educationist and Proprietor of a school based in Lagos in an Interview with the New Telegraph noted that the Supreme Court judgment granting financial autonomy to local governments will improve service delivery and efficiency.

Akinola noted that autonomy will allow the local governments to manage their resources independently and make decisions tailored to local needs, leading to better infrastructure for the people.

Speaking further, Akinola noted that, “with greater control over resources, local governments are more accessible to their people than the state governments, therefore they will be able to promptly attend to their needs, promoting transparency and good governance.

‘‘LG Autonomy can lead to more inclusive decision-making processes, empowering citizens to contribute to national development. They can respond quickly to local needs, thereby facilitating faster developments and project implementation in the communities.

Local governments can also address local security concerns more effectively, enhancing citizen safety.’’ Akinola further said, ‘‘local governments can preserve and promote local cultures and traditions.

By addressing local needs and promoting development, local government autonomy can contribute to poverty reduction. “All these are visible if the local government chairmen are not included in the immunity clause.’’

NGF

Meanwhile, the Governor of Kwara State, Mallam AbdulRahman AbdulRazaq, who is also the Chairman of Nigeria Governors Forum, has said that the governors were happy over the Supreme Court judgment that granted autonomy to local governments in the country.

He said: “We welcome the ruling of the Supreme Court; Our Attorney Generals have applied for the enrollment order, which we’ll study carefully. By and large, the governors are happy with the devolution of power concerning local government autonomy.

It relieves the governors of some burdens. People don’t know how much states expend in bailing out local governments. It’s not going to affect the state; we’ve not tampered with local government funds.

“What the local governments have to do is to manage themselves, especially with the upcoming minimum wage. They have to manage their affairs and make sure salaries are paid and traditional rulers get their five per cent. Those are the main issues.’’