FAAC Allocations: 774 LG councils accuse state Finance commissioners of colluding with Governors, threaten legal action

The Incorporated Trustees of the Association of Local Governments of Nigeria (ALGON) have accused State Commissioners for Finance of conspiring with governors to obstruct the direct payment of allocations from the federation account to the 774 local government councils’ accounts. 

This accusation was made in a letter addressed to the Chairman of the Forum of State Commissioners for Finance of Nigeria, dated July 30 and signed by Mike Ozekhome (SAN). 

ALGON has threatened to initiate contempt proceedings against the commissioners if they fail to comply with a Supreme Court order that approved the direct allocation of FAAC funds to the 774 local government areas, bypassing state control. 

ALGON seeks immediate compliance 

Nairametrics previously reported that the Supreme Court had delivered its verdict following the federal government’s suit, which aimed to prevent the governors of 36 states from spending or tampering with the 20.6% allocation from the federation account to local government areas, among other reliefs targeting local government autonomy. 

The apex court ruled that the allocations to joint state and local government accounts were merely procedural practices adopted in the past. It emphasized that it was not the intention of the 1999 Constitution for governors to retain funds due to the LGAs. 

The apex court declared that the amount allocated to and credited to Local Government Councils in the Federation Account can be paid directly by the Federation to democratically elected Local Government Councils, among other rulings. 

Seizing the moment, ALGON’s lawyer, Ozekhome, stated in his letter that his client’s enthusiasm over the apex court decision has been allegedly thwarted by the State Finance Commissioners’ Committee. 

According to him, rather than comply with the clear directives of the apex court’s judgment, “your Committee, possibly acting on directives and at the behest of the 36 State Governors, has resorted to various excuses, artifices, designs, and subterfuges to undermine and frustrate this binding judgment of the highest court of the land, nearly three weeks after its delivery.” 

Ozekhome expressed that his clients are disturbed by the situation and stated ALGON’s readiness to assist in working out the modalities for the FAAC disbursement, having engaged the services of certified Consultant Dr. Samuel Babatunde, who has already produced a workable template for immediate disbursements. 

“You are well aware of this fact but have chosen to ignore our client and the apex court’s decision. 

“Our clients have so far waited in vain to receive their allocated funds. This is unfortunate, highly regrettable, and completely unacceptable, as court judgments are meant to be obeyed without any further demand. We are discussing the clear judgment of the apex court! We need not remind your Committee that disobedience to court orders is severely punishable as contempt of court under our laws. We will say no more about the dire consequences of such a drastic step,” he stated in his letter, made available to Nairametrics. 

He urged the commissioners and state governors to comply with the Supreme Court order. 

ALGON’s demands are as follows: 

“Our client has instructed us to demand, and we hereby demand, full compliance by your Committee (and its principals, the State Governors) to immediately credit each of the 774 LGCs of Nigeria with its aggregate entitlement of funds, comprising its respective share in the Federation Account as computed at the last meeting of the Federation Account Allocation Committee (FAAC), in which your Committee fully participated and endorsed. 

“Our client’s Consultant and other duly accredited representatives are standing by and ready to assist your Committee in achieving an immediate resolution of this matter by paying the funds as directed by the Supreme Court. 

“Take notice that if you fail, neglect, or refuse to accede to our client’s modest demands as stated in paragraph 8 above, we shall be left with no option but to initiate contempt proceedings against your Committee and its members.” 

What You Should Know

Following the Supreme Court verdict, the Federation Accounts Allocation Committee (FAAC) distributed N1.354 trillion in June revenue among the Federal Government, states, and Local Government Councils (LGCs). 

This distribution occurred during the July 25, 2024, FAAC meeting in Abuja, chaired by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy. 

Edun informed the press that the Supreme Court judgment could not be implemented at that time because the actual proceedings had not yet been handed down to the Attorney-General of the Federation, Lateef Fagbemi, for review and implementation. 

“They were not in the hands of the Attorney-General for him to start implementing,” he said, assuring that the Supreme Court judgment on local governments will be faithfully implemented. 

In a recent forum, Lateef Fagbemi (SAN) vowed to ensure the prosecution of any serving local government chairpersons or councillors tampering with the Federation Accounts Allocation Committee (FAAC) allocations to the LGs. (Nairametrics)