Local governments in Nigeria are moving forward with the establishment of accounts at the Central Bank of Nigeria in preparation to directly receive federal allocations starting this January. This initiative stems from a significant ruling by the Supreme Court on July 11, 2024, which upheld the financial autonomy of the nation’s 774 local government areas, deeming it unconstitutional for state governors to control their funds. The court mandated that allocations be deposited directly into the accounts of local governments.
Despite the court’s decision, reports suggest that some governors are still handling local government funds, six months after the ruling. Previously, local government areas shared joint accounts with state governments, leading to potential deductions and mismanagement by governors.
The National Publicity Secretary of the Association of Local Governments of Nigeria, Hamisu Anani, confirmed that local governments are in the process of opening accounts with the CBN. He acknowledged that although progress is underway, challenges persist, especially in states where the CBN does not have a physical presence.
Anani highlighted ongoing efforts to address these challenges, emphasizing the importance of not only implementing the changes but also ensuring their sustainability. Collaboration with key stakeholders, including state governors, finance commissioners, and the Attorney General of the Federation, is crucial to address any gaps in the implementation process and to guarantee long-term success. The focus is not just on executing the changes but also on maintaining them to avoid future issues.