LGs face fresh hurdle in bid for direct monthly allocations

Local governments across Nigeria are facing fresh challenges in their quest to receive monthly allocations directly from the Federation Account, as the Central Bank of Nigeria (CBN) has mandated a comprehensive two-year audit of their finances before funds can be remitted.

The direct allocation, which was supposed to commence last month, was postponed after many local councils failed to submit the required financial details. Consequently, their share of ₦361.754 billion from the ₦1.424 trillion distributable revenue was still routed through state governments.

To implement the financial autonomy granted by the Supreme Court, the CBN is currently opening bank accounts for the 774 LGAs, but insists that a full financial audit is necessary before any accounts can be activated.

A source at the CBN told The Nation that the audit report is crucial for understanding the financial health of the LGAs, many of which have never operated independently from their state governments.

Meanwhile, an Inter-Ministerial Committee led by the Secretary to the Government of the Federation (SGF) is finalizing a framework to enforce the Supreme Court ruling on local government autonomy.

A committee member disclosed that a template is being developed to allow the Accountant General of the Federation (AGF) to deduct funds meant for essential services—such as primary education and healthcare—directly from the LGAs’ FAAC allocations and transfer them to relevant agencies.

With the next FAAC meeting scheduled for February, concerns remain about whether local governments will meet the audit submission deadline, potentially delaying direct funding once again.