A recent judgement by the Supreme Court ordered that the 774 local government councils in the country should manage their funds themselves, while adding that it is unconstitutional for state governors to hold funds allocated to the local government which was the norm, against this backdrop The ICIR looked at how much had been disbursed to local governments in the last three years.
Between January 2022 and June 2024, the federal government, through its Federation Account Allocation Committee (FAAC), released a total of N6.92 trillion for the 774 local governments in Nigeria.
The ICIR compiled this disbursement from data released by the National Bureau of Statistics (NBS) monthly report on FAAC allocation.
The ICIR gathered that in 2022, the total allocation disbursed to the local government was N2.62 trillion, while in 2023, the total disbursement to the local governments was N2.60 trillion. Meanwhile, between January and June 2024, a total of N1.69 trillion has been disbursed to the 774 local governments.
The data showed that more allocations have been made to the LGAs within the last year after the fuel subsidy was removed in May 2023 when President Bola TInubu assumed office as president of Nigeria.
The ICIR checks showed that between June 2023 and June 2024, one year under Tinubu’s administration, FAAC distributed a total of N3.34 trillion to the local government.
| Month |
2024 |
2023 |
2022 |
| January |
N288.93 billion |
N221.81 billion |
N163.88 billion |
| February |
N278.04 billion |
N183.23 billion |
N131.88 billion |
| March |
N267.15 billion |
N173.94 billion |
N722.38 billion |
| April |
N288.69 billion |
N171.26 billion |
N167.91 billion |
| May |
N293.82 billion |
N213.67 billion |
N149.25 billion |
| June |
N282.48 billion |
N221.79 billion |
N175.94 billion |
| July |
– |
N218.06 billion |
N182.33 billion |
| August |
– |
N236.23 billion |
N210.62 billion |
| September |
– |
N266.54 billion |
N164.25 billion |
| October |
– |
N210.90 billion |
N172.78 billion |
| November |
– |
N225.21 billion |
N177.09 billion |
| December |
– |
N258.81 billion |
N202.49 billion |
| Total |
N1.69 trillion |
N2.61 trillion |
N2.62 trillion |
Table showing the disbursement to LGAs in three years. Source: NBS
A senior research & policy analyst for BudgIT, Vahyala Kwaga, told The ICIR that the issue with the data on the distribution of local government funds is the uncertainty in precisely how much the local governments actually got at the end of the day.
He said, “It is an open secret that governors “hijack” funds in the Joint Account of the states and the local Government. More worrisome is despite the minimal amount of money received by the local governments, publication of the spending efficiency is nonexistent. This speaks to the lack of transparency even with the little received by the LGAs.”
Supreme court judgment
A recent judgement by the Supreme Court has ordered that the 774 local government councils in the country should manage their funds themselves, adding that it is unconstitutional for state governors to hold funds allocated to the local government.
Every month, allocations are disbursed from the revenues generated into the federation accounts. The bulk of the revenue shared at FAAC meetings by the federal, state, and local governments are earnings from oil exports, taxes, and other statutory allocations.
In the current revenue-sharing formula, the Federal Government gets 52.68 per cent of the revenue, states 26.72 per cent, and local governments 20.60 per cent.
The fund, which serves as the primary revenue stream for most states, is designed to facilitate development across various tiers of government, enabling states and local governments to fulfil their financial obligations and deliver essential services to their citizens.
However, up until the recent judgement, allocation to the local government has always been managed or controlled by the state governors.
LG autonomy
The attorney general of the federation, Lateef Fagbemi, had filed a lawsuit on behalf of the Federal Government, seeking to grant full autonomy and direct funding to all 774 local government councils in the country.
But this suit was counterclaimed by the 36 state governments, arguing that the Supreme Court lacked the jurisdiction to hear the case.
In the lead judgement read by the justice, Emmanuel Agim, the apex court said the AGF has the right to institute the suit and protect the constitution. It also added that Local Government allocations from the FAAC should be paid directly to them henceforth, and not to state government coffers as this is a breach of the 1999 constitution.
Recall that The ICIR reported that former President Muhammadu Buhari, in May 2020, signed an Executive Order to grant financial autonomy to the judiciary, legislature, and local government councils but analysts said the misappropriation of LGA funds would not end until a proper constitutional amendment is done.
