In a major step towards financial autonomy for local governments, the 774 councils in Nigeria are set to open dedicated accounts with the Central Bank of Nigeria (CBN) for direct allocation of funds from the Federation Account.
This initiative, announced by the Association of Local Governments of Nigeria (ALGON) President, Bello Lawal Yandaki, aligns with the Supreme Court ruling mandating direct disbursement of funds to local governments, bypassing state governments.
According to Yandaki, the CBN is awaiting federal directives to initiate the account-opening process, which he assured could be completed within 24 to 48 hours per council. He attributed the delay in disbursement to the failure of some councils to provide necessary banking details to the Federation Accounts Allocation Committee (FAAC).
To ensure accountability and prevent fund mismanagement, the Nigerian Financial Intelligence Unit (NFIU) will oversee the utilization of these allocations. Additionally, an anti-corruption task force comprising officials from the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) has been set up to prosecute fraudulent local government officials.
A source familiar with the matter emphasized that local government chairmen will now be directly accountable for their financial operations. “With direct allocations, there is no excuse to blame state governors for fund diversion. Chairmen must take full responsibility for how these funds are spent,” the source stated.
Despite the Supreme Court ruling, some state governments have been slow to comply. Anambra State, for example, has a law requiring that local government funds be managed through a joint state/local government account, raising concerns about potential violations.
The anti-corruption team has been mandated to track any unauthorized fund transfers from local councils to state governments. Officials warned that any chairman found transferring bulk funds back to state governments would be held accountable. “If a chairman illegally redirects funds, anti-corruption agencies will intervene,” the source added.
During the recent FAAC meeting, N361.754 billion was allocated to local governments. However, due to administrative bottlenecks, these funds remain undistributed. FAAC officials have urged councils to rectify outstanding banking details before the month’s end to avoid further delays.
This initiative marks a significant shift in Nigeria’s governance structure, ensuring local governments receive their due allocations while promoting transparency and accountability at the grassroots level.
