Exactly two years after the Supreme Court’s landmark ruling granting full financial autonomy to Nigeria’s 774 local governments, the historic judicial victory has largely stalled on the ground.
A detailed investigation has revealed that despite the apex court’s order mandating direct payments, state governments have continued to bypass the directive, maintaining a tight grip on a massive ₦10.48 trillion allocated to the third tier of government between July 2024 and June 2026.
The Rising Cash Inflow
Following federal revenue gains, the allocations distributed by the Federation Account Allocation Committee (FAAC) to local councils rose significantly over the last 24 months:
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Year 1 (July 2024 – June 2025): Local councils were allocated ₦4.496 trillion, averaging about ₦374.65 billion monthly.
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Year 2 (July 2025 – June 2026): Allocations jumped by 33.1% to ₦5.984 trillion, averaging ₦498.67 billion monthly.
Despite this massive cash injection meant to stimulate rural economies, council officials and labor unions report that little to no financial independence has actually reached the grassroots.
“Nothing Has Changed” — NULGE
The National Union of Local Government Employees (NULGE) has raised the alarm, confirming that the federal government has yet to successfully bypass state apparatuses to pay local government statutory allocations directly.
“Up till now, they have not started the implementation of the financial autonomy… Nothing has changed. Until the allocations go directly to the local governments as ordered by the Supreme Court, we cannot say financial autonomy has been implemented.” — Aliyu Kankara, National President of NULGE
State-Level Defiance Tactics
Findings from across the federation show that state governors have deployed various administrative and legal maneuvers to maintain custody of the funds:
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The Joint Account Loophole: States like Kaduna and Kano continue to actively operate the State-Local Government Joint Account (SJLGA), funneling federal funds into state-controlled coffers before making arbitrary distributions.
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Administrative Bottlenecks: Some states have rushed local laws through their State Houses of Assembly. For instance, Anambra State passed a local administration law that legally compels local councils to deposit their federal allocations back into state-overseen accounts.
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Caretaker Committees: Governors continue to run local councils using unelected caretaker committees instead of holding democratic elections, ensuring the administrators remain directly beholden to the state executive.
Federal Committee Stalled
Shortly after the July 2024 judgment, the Federal Government inaugurated an inter-ministerial committee designed to iron out the transition, resolve pension liabilities, and clear primary school teacher salary payment structures.
However, constitutional ambiguities—specifically the fact that the 1999 Constitution still designates local governments as administrative creations of the states—have created a legal gridlock that state governors are actively exploiting to protect their financial empires.
As the legal tug-of-war continues, civil society groups warn that until Sections 7 and 162 of the Constitution are explicitly amended by the National Assembly, the Supreme Court’s landmark judgment will remain a theoretical victory while local governments remain financially starved.
Ayodele Quadri
Correspondent
