The Account-General of the Federation, Oluwatoyin Madein and the Attorney-General and Minister of Justice Lateef Fagbemi, SAN, have commenced talks on the implementation of the July 11, 2024 Supreme Court judgment on local government autonomy as direct allocation disbursement to the 7774 LGAs continues to suffer delay.
In a move to enforce the verdict, the two senior officials have been holding consultations on the modalities for submitting LGAs’ bank accounts for direct payment of council allocation but are reportedly facing challenges identifying LGAs with democratically elected officials.
This was contained in the Federation Account Allocation Committee Technical Sub-Committee meeting minutes obtained by The PUNCH on Sunday.
The minutes, shared by an insider, indicate that only the local government areas in Delta State have submitted their account details to the Office of the Accountant-General of the Federation.
It revealed that the submission of account details by the Delta State LGAs was confirmed during the FAAC Technical Sub-Committee meeting held on January 17, 2025, at the Federal Ministry of Finance Headquarters, Abuja.
The document showed that while the OAGF had started receiving account details from various sources, only Delta LGAs had fully submitted their details.
Some LGAs reportedly provided account details directly, while others did so through their state governments.
Despite this progress, discussions on the modalities for submitting the accounts are still ongoing, with consultations with the AGF yet to be concluded.
According to the Accountant-General, “The Office had started receiving account details from various sources; some directly while others were going through the states.
“So far, only local governments in Delta State have provided account details. However, consultation with the Attorney-General of the Federation on the modalities of the submission of the accounts was still ongoing.”
The minutes further indicated that concerns were raised about the legal procedures for submitting these accounts, particularly in relation to constitutional provisions.
The meeting, chaired by the Accountant General highlighted that the process had encountered challenges, particularly in identifying LGAs with properly elected leadership.
The minutes stated that a key obstacle to implementing the system was determining which local government councils had constitutionally elected chairmen.
Madein reportedly noted that this foundational stage remained unclear and that for local governments with duly elected leadership, the question of mechanisms to ensure they receive direct allocations must be addressed.
She explained that several complexities needed to be resolved before the system could function effectively.
The minutes further showed that Madein said that the Office of the Accountant General of the Federation would seek clarification from the AGF to assess the current status and determine the next steps.
The Accountant General of Niger State, referred to as AG Niger in the document, suggested that once the AGF provides the necessary modalities, a formal letter should be sent to the OAGF outlining the required steps for local governments to follow in submitting their accounts.
The representative emphasised that without clear guidance, actions may vary across different states, potentially leading to inconsistencies in implementing financial autonomy for LGAs.
The document also revealed that the chairman directed the Director of the Federation Account to take note of concerns regarding communication with the Attorney General’s office.
It read in part, “The chairman responded that a system was set to be implemented, but the initial challenge lay in determining which local government councils had constitutionally elected chairmen. She remarked that this foundational stage remained unclear.
“Additionally, for those with properly elected leadership, the question arose as to what mechanisms would be deployed to ensure they receive direct allocations. This was because numerous complexities needed to be addressed.
“The chairman added that OAGF would seek clarification from the Attorney-General of the Federation to assess the current status and how to progress regarding the current month.
“The chairman directed the Director Federation Account to take note of the concerns in communicating with the Attorney-General’s office.”
With Delta State LGAs leading the way in submitting account details, other states are expected to follow suit once clear directives from the AGF are issued.
One of the newly elected local government chairmen, in Ondo State, speaking on the condition of anonymity, disclosed that LG’s bank account would be submitted after the Joint Allocation Committee meeting today (Monday).
“We are going to submit the accounts to the CBN tomorrow (today) after the JAC meeting,” he stated.
The PUNCH earlier reported that the Central Bank of Nigeria had commenced profiling the chairmen and signatories to the bank accounts of the 774 local government areas in the country, as part of processes to commence local government autonomy.
The Director of Legal Services at the CBN, Kofo Salam-Alada, explained that this was necessary to ensure financial accountability.
However, the Association of Local Governments of Nigeria said it had received no communication from the apex bank concerning the opening of bank accounts.
Providing an insight into the delayed fund disbursement, the CBN legal director disclosed that the apex bank had no direct banking relationship with the LGAs.
Salam-Alada stated, “This is all about standard procedure in the form of KYC (Know Your Customer). Anyone who will be a signatory to the account must be profiled. The process is ongoing, and we are collaborating with the AGF’s office. We have also written to the LGAs.”
He urged the Association of Local Government of Nigeria to encourage its members to engage with the CBN at the local level, assuring that once proper documentation is completed, the accounts will be operational within 48 hours.
“We are using this opportunity to call on the 774 local government chairmen to come forward for their documentation. No account can be operationalised without the prerequisite Customer Due Diligence,” he added.
However, ALGON’s representative at the event, Sam Akala, disputed the CBN’s claim, stating that he was unaware of any official communication from the apex bank regarding the account opening process.
An insider source familiar with the development, who spoke to The PUNCH on the condition of anonymity, confirmed that the apex bank had engaged with members of the ALGON regarding the matter.
The insider revealed that while guidelines for the process are currently being drafted, the framework has yet to be finalised.
The source added that once completed, these guidelines would pave the way for the opening of dedicated accounts to facilitate the implementation of financial autonomy for local governments.
LGs tackle CBN
Meanwhile, local government chairmen have accused the CBN of insincerity over its claim that it was verifying signatories to the LGAs’ bank accounts as a precondition for implementing the Supreme Court judgment on council autonomy.
The councils said they have yet to receive a directive from the apex bank to open dedicated bank accounts for the monthly federal allocation.
Reacting to the CBN legal director’s assertion that the apex bank had commenced profiling the 774 council chairmen and the signatories to the LGAs’ bank accounts to ensure financial accountability, the Association of Local Governments of Nigeria across the states said it had received no communication concerning the opening of bank accounts.
Speaking with The PUNCH, the ALGON Chairman in Abia State and Chairman of the Mayor Isuikwuato LGA, Chinesu Ekeke, said the CBN had yet to invite any LG chairman for signatory verification.
Ekeke said, “No, we have not been invited for signatory verification. I am just hearing it. I have not heard it from any other source. I have not seen any publication to that effect, even ALGON headquarters, nobody has informed us.”
Similarly, a key member of the ALGON executive council in Oyo State disclosed that no council chairman had received any invitation letter from the CBN either through the state Ministry of Local Governments and Chieftaincy Affairs or individually.
An ALGON official, who preferred to be anonymous, told The PUNCH in Ibadan, that the apex bank was only trying to politicise the issue.
He said, “Don’t mind the CBN. Probably they are doing that within the confines of their mandate. The CBN has not invited any local government chairman in this state. It has not invited anybody at all.
“If the CBN has sent the message across to the state ministry of local governments, the ministry doesn’t delay any information. So, as far as this state is concerned, the ministry of local governments is very proactive in any matter relating to local governments.”
Similarly, council chairmen in Benue State told The PUNCH that there was no official letter or memo on the verification exercise from either the Federal Government, state government or ALGON.
Speaking on condition of anonymity, one of the council chairmen stated, “There is no memo or directive yet to local government chairmen in the state and to my knowledge, across the nation’s 774 local government chairmen to open dedicated accounts with the Central Bank of Nigeria to facilitate the direct disbursement of allocations from the federation account, not to talk of verifying signatories.’’
Speaking with The PUNCH, the Chairman of Mbaitoli LGA, Imo State, Ifunanya Nwanegwo, also said he had not been contacted for any verification purposes by the CBN.
Similarly, the Chairman of Garko LGA, Kano State, Saminu Garko, said no council had opened an account with the CBN.
He said, “No local government in Kano State opened an account with the Central Bank of Nigeria as of now. I am not aware of any LG that opened an account with the bank.
“Moreso, the Central Bank of Nigeria has not invited any local government chairman in the state for the verification of signatories. We just read in the newspapers that the bank is inviting local government chairmen for the verification exercise.”
Also, the Ekiti East LGA boss, Oluwasegun Ojo, said he was not aware of the verification.
Ojo, who is also the Chairman of ALGON in Ekiti State, said, “There is no such verification to the best of my knowledge. On the issue of local government autonomy, the main point is that for us at the local governments, we are just waiting for how everything will play out between the Federal Government and state governments.
“We are of the opinion that both the state governments and the Federal Government want to arrange something that will better the lots of the citizenry. For us, we are just waiting and we know they will navigate through it and they will reach an agreement.”
Two council chairmen in Ogun State denied that the CBN contacted them on the issue of signatories to the LGAs’ accounts.
The chairmen, who spoke off-record, said, “No, we have not been contacted. We still had our meeting last week, nothing of such was discussed and I am sure no local governments in the state have sent any accounts anywhere because of LG autonomy.”
A senior official in a local government area in Osun State, who preferred to remain anonymous, simply said, “We submitted account details of local government areas in Osun already to appropriate quarters.
“But I may not be able to say more than that. We have not received our February salary. Before now, our Heads of Local Government Administration and Directors of Finance usually sign our salary voucher centrally at the Ministry of Local Government in Abere. With the autonomy for council areas taking shape, that may change.”
A top official in Ado Local Government, Ekiti State, said, ‘’I can tell you for free that local governments in Ekiti State are yet to forward their accounts anywhere for commencement of autonomy. My local government has not and others that I know have not as well.”
A council chairman, who preferred anonymity, noted that the Association of Local Governments of Nigeria leadership was in a better position to address the issue.
The ALGON Chairman in Kwara state, Alhaji Abubakar Abdullahi, disclosed that the local government councils in the state have not received instructions to provide their account details from the apex bank.
Abubakar, who is the chairman of Kaiama Local Government Area, “I have not received any instruction that local government councils in Kwara State should submit their bank account details to CBN and I have no idea about it. The local governments in Kwara state have no dealing with the CBN.’’
The Information Officer to Bauchi LGA, Babangida Jahun, was not sure if the LGAs had submitted their account details to the CBN.
Jahun stated, “The local government chairmen have recently travelled to Abuja regarding the local government autonomy, but I am not certain if bank account details were submitted.”
Chairman of Jos North LGA, Plateau State, Mr J Chris, said he has not received instructions to submit the LGA’s account details. “I cannot say whether we have submitted or not, but I’m yet to get instructions on that,” he stated.
The Supreme Court had on July 11, 2024, affirmed the financial autonomy of the 774 local government areas in the country and prohibited governors from further control of funds meant for the councils.
The apex court also directed the Accountant-General of the Federation to pay local government allocations directly to their accounts, declaring the non-remittance of funds by the 36 states unconstitutional. But eight months after the judgment, the financial autonomy has yet to take effect.
The National Union of Local Government Employees earlier warned the CBN against aiding state governors in undermining the financial autonomy of local government councils, following reports that the apex bank has refused to open accounts for councils over alleged non-compliance with auditing requirements.
The NULGE National President, Hakeem Ambali, dismissed claims that local governments had failed to provide two years of audited accounts, insisting that no council in the country lacks at least three years of audited financial records.
According to Ambali, LGs are ready to present their audited accounts, which will ensure a smooth opening of their accounts with the CBN to ensure that LGs receive their allocations directly.(Punch)
