Fiscal autonomy: Why CBN hasn’t released funds to 774 LGAs — FG

•Says profiling of signatories ongoing •AGF slams govs over illegal removal of LG officials

THE Federal Government has explained why despite the order of the Supreme Court, the Central Bank of Nigeria, CBN, has not commenced direct release of funds to the 774 local government areas, LGA, in the country.

In separate presentations, the Attorney-General of the Federation and Minister of Justice, Mr. Lateef Fagbemi, SAN, and CBN’s Director of Legal, Mr. Kofo Salam-Alade, maintained that modalities that would enable the various LGAs to directly draw funds from the federation account were not in place.

The duo further disclosed that those that would serve as signatories to accounts of the various LGAs were still being profiled by the necessary bodies.

Speaking at a state of the nation discourse on strengthening of local government autonomy in Nigeria, organised by the Nigerian Bar Association, NBA, the AGF revealed that shortly after the July 11, 2024, landmark judgement of the Supreme Court that granted fiscal autonomy to the LGAs, an implementation committee was set up.

According to the AGF, whose speech was read by the Director of Civil Litigation, Federal Ministry of Justice, Mr. Tijjani Gazali, SAN, the committee, comprised representatives of FG, the Association of Local Governments of Nigeria, ALGON, and the Nigerian Governors Forum, NGF.

He said the committee had been working assiduously to come up with “the most practicable framework for the full implementation of the judgment, especially regarding direct payment of allocations from the federation account to local government councils.

“The committee is expected to complete its mandate any time from now and present its recommendation to Nigerians.’’

The AGF said it was President Bola Tinubu’s determination to emancipate the LGAs as the third tier of government in the country that led his administration to drag the 36 governors to the Supreme Court.

However, the AGF decried that despite the judgment of the apex court that outlawed the illegal removal of democratically elected local government councils by state governors, it was unfortunate that some states had continued to flagrantly carry on with the illegality.

He described as worrisome the unconstitutional connivance by state governors and their State Houses of Assemblies to wily nilly dismantle democratically elected local government structures without recourse to the rule of law, and replacing them with their stooges.

“Let me state in unequivocal terms that this act is tantamount to treason and must be treated as such. Now while it is true that Section 308 of the Constitution grants the governor immunity from prosecution, I wish to be clear that this flagrant disobedience to the Supreme Court judgment will have unpleasant consequences for the state as a whole, should it persist,” the AGF warned.

He said the local government structures had almost become extinct in the country until his office took the matter before the apex court.

Providing more insight into why the LGAs had yet to receive funds directly from the federation account, despite the order of the Supreme Court, CBN’s Director, Legal, Mr. Salam-Alade, said the apex bank hitherto had no banking relationship with the LGAs.

He said the bank has in its bid to ensure transparency and accountability, commenced the process of profiling those that would serve as signatories to accounts of the respective LGAs.

“This is all about the standard procedure in the form of KYC (Know Your Customer). Anyone who is going to be a signatory to the account must be profiled.

“The process is ongoing and we are collaborating with the office of the AGF. We have also written to the LGAs.

“All that ALGON needs to do is to encourage its members to approach the CBN within their locality, within 48 hours, their problem will be solved.

“We are using this opportunity to call on the 774 men to come forward for their documentation. No account can be operationalized without the prerequisite Customer Due Diligence, CDD,” the CBN Legal Director added.

However, contrary to CBN’s claim, a representative of ALGON at the event, Mr. Sam Akala, said he was not aware that the apex bank wrote to any LGA, with respect to the account opening process.

“I cannot confirm that such communication has been received officially,” he insisted, even as he expressed the readiness of ALGON to embrace the challenge of taking development down to the grassroots.

Earlier in his welcome remarks, NBA President, Mazi Afam Osigwe, SAN, said the discourse was to help the association come up with a position that would not only guarantee peace and security, but also ensure that the LGAs, which are closest to the people, became functional and their finances used for the good of the people.

“There must be democracy and the Local Government level. All the other tiers of government must allow the LGs to breath.

“If we fail to get it right at the LG level, we may be setting a stage for a greater calamity,” Osigwe added.

Asides from attorneys-general of states, other dignitaries at the event that had a retired Justice of the Supreme Court, Ejembi Eko, as guest speaker, included heads of key government agencies and senior legal practitioners in the country.