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LGAs financial autonomy faces fresh hurdle on CBN demand

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Local governments across Nigeria are facing a new challenge in their push to receive monthly allocations directly from the federation accounts, as they must now submit a two-year account audit to the Central Bank of Nigeria (CBN) before funds can be disbursed.

 

The direct revenue remittance, initially scheduled to begin in January, was postponed after many of the 774 local councils failed to provide the required account details. As a result, their N361.754 billion share from the total N1.424 trillion distributable revenue for the month was routed through the state governments.

 

The CBN has begun the process of opening accounts for local governments to facilitate direct payments, in line with the financial autonomy secured through a Supreme Court ruling in July 2024.

 

However, with the next allocation due in a few weeks, concerns are growing over the ability of councils to submit the mandated audit reports before the February meeting of the Federation Account Allocation Committee (FAAC).

 

Sources at the CBN confirmed that the bank would not proceed with account openings without a clear understanding of each local government’s financial position.

 

“We cannot just open fresh accounts for the LGAs when many of them have not operated as an independent government entity,” The Nation quoted a CBN source.

 

Meanwhile, an Inter-Ministerial Committee, led by George Akume, the secretary to the government of the federation (SGF), is working on a framework to enforce the Supreme Court’s ruling on local government autonomy.

 

A member of the committee disclosed that a template is being developed to empower the Accountant General of the Federation (AGF) to directly allocate funds for essential services, such as primary education and healthcare, and transfer them to the relevant agencies.

 

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