Local Government autonomy row deepens as states collect N7.43tn in allocations

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…Local government allocations have continued to pass through state governments amid disputes involving the Central Bank of Nigeria,

ABUJA, NIGERIA- The iNews Times | The Association of Local Governments of Nigeria (ALGON) and the National Union of Local Government Employees (NULGE) have endorsed President Bola Tinubu’s plan to enforce direct disbursement of local government funds from the Federation Account Allocation Committee (FAAC), as state governments continue to exercise control over council allocations.

At the 15th National Executive Committee meeting of the All Progressives Congress held at the State House Conference Centre in Abuja, Tinubu called on state governors to comply with the Supreme Court judgment granting financial autonomy to local governments. He warned that continued non-compliance could force him to issue an Executive Order mandating direct allocation of funds to councils from the Federation Account.

The President’s warning followed the July 11, 2024, Supreme Court ruling which upheld the Federal Government’s suit to enforce financial independence for local governments. In a unanimous decision, a seven-member panel of the apex court ruled that it is unconstitutional for state governments to retain or manage funds meant for local councils. The court also held that the use of caretaker committees amounted to state control of local governments and violated the 1999 Constitution.

However, 18 months after the judgment, findings show that implementation remains largely stalled. Local government allocations have continued to pass through state governments amid disputes involving the Central Bank of Nigeria, state governments, local councils and other agencies.

An analysis of FAAC disbursements, based on official statements issued by the Office of the Accountant General of the Federation, reveals that state governments exercised control over at least N7.43tn allocated to local councils between July 2024 and December 2025, despite the court’s ruling.
Over the 18-month period, the 774 local governments were allocated N7.43tn, derived from distributions between July and December 2024 and throughout 2025. Councils received N2.08tn in the second half of 2024, rising sharply to N5.35tn in 2025.

FAAC data show that allocations to local governments stood at N337.02bn in July 2024, increased to N343.70bn in August, dipped to N306.53bn in September, and rebounded in the final quarter, peaking at N402.55bn in December. Despite the rising inflows, funds continued to be routed through the State Joint Local Government Account system, enabling governors to retain significant influence over council finances.

The trend intensified in 2025, with monthly allocations crossing N440bn by mid-year and peaking at N529.95bn in October. In total, councils received N5.35tn in 2025, compared to N3.77tn in 2024, an increase of N1.58tn or 42 per cent year-on-year.

This growth mirrored broader increases in FAAC distributions, with total allocations to all tiers of government rising from N13.91tn in 2024 to N20.28tn in 2025. However, concerns persist that the continued control of council funds by states is undermining grassroots development.

Speaking in Abuja, ALGON Secretary General, Muhammed Abubakar, expressed confidence that governors would comply with Tinubu’s directive, noting that the President’s warning was clearly anchored on the Supreme Court ruling. He said ALGON would support the President should executive action become necessary.
Similarly, NULGE chapters across several states welcomed Tinubu’s proposed Executive Order, describing it as long overdue and capable of strengthening accountability, improving workers’ welfare and enhancing grassroots governance.

While some state governments, including Kebbi and Jigawa, signalled readiness to comply with the ruling, others offered mixed reactions, with officials in states such as Nasarawa and Adamawa disputing claims of interference in council funds.

Meanwhile, the Nigeria Governors Forum said discussions were ongoing and promised that governors would soon brief the public on their position following consultations with the President.