In a move aimed at promoting financial autonomy and accountability at the grassroots level, the Central Bank of Nigeria (CBN) is set to open dedicated accounts for all 774 local government councils across the country. This initiative follows the Supreme Court ruling that mandates the direct disbursement of federal allocations to local governments, bypassing state governments.
The National President of the Association of Local Governments of Nigeria (ALGON), Bello Lawal Yandaki, announced the development during a press conference in Katsina. Yandaki emphasized the importance of this change, particularly in light of the ruling that affirmed the financial independence of local governments.
“The opening of these dedicated accounts is crucial for the implementation of the Supreme Court ruling on local government autonomy,” said Yandaki. “The CBN is waiting for directives from the Federal Government to initiate the process. Once approved, the accounts can be opened within 24 to 48 hours for each council.”
The move is expected to bring a transformative shift in the financial management of local governments. However, as the rollout begins, concerns have arisen regarding the delays in disbursing funds to councils. According to Yandaki, the delay has been attributed to local governments failing to provide necessary bank details to the Federation Accounts and Allocations Committee (FAAC), a requirement for disbursing funds.
“We understand the concerns regarding delays,” Yandaki said. “However, the hold-up is not with the central government or CBN but with the councils not submitting their banking information. This is a procedural issue that should be resolved soon.”
The January FAAC meeting revealed that a total of N361.754 billion was allocated to the local governments, but administrative bottlenecks have prevented the disbursement of these funds. FAAC officials have urged the councils to resolve the outstanding issues before the end of the month to avoid further delays.
The Federal Government’s decision to funnel funds directly to local governments is designed to eliminate the middleman—state governors—who have historically been accused of diverting local government allocations for personal or political purposes. The measure is intended to enhance financial autonomy at the local government level and improve governance.
However, this shift has met with resistance in some states. In Anambra State, for example, a state law mandates that local government funds must pass through a joint state/local government account, raising questions about how the Federal Government’s directive will be enforced in such instances.
Despite these concerns, the Federal Government has set up a robust framework to ensure transparency and accountability in the management of these funds. The Nigerian Financial Intelligence Unit (NFIU) will oversee the monitoring of financial activities within the local government accounts to ensure compliance with anti-corruption laws and proper fund utilization.
“The NFIU will play a key role in monitoring these accounts,” a source from the Federal Government said. “Their job is to ensure that the funds are used for their intended purpose and not diverted for personal gain or political expediency.”
In addition to the NFIU, the government has also deployed an anti-corruption team comprising officials from the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC) to track financial transactions at the local government level.
“These anti-corruption agencies will ensure that any misuse of funds is investigated and prosecuted,” the source added. “If any local government chairman engages in illicit financial practices, they will be held accountable and face legal consequences.”
The Federal Government’s approach has left no room for excuses, particularly for local government chairmen. They are now directly responsible for managing their financial operations without the possibility of blaming state governors for alleged diversion of funds.
“If any chairman is found to be transferring funds back to the state government, they will face the consequences,” the source warned. “The anti-corruption team is closely monitoring these transactions, and they will act swiftly to address any violations.”
Local government chairmen have been cautioned to be vigilant and avoid any actions that could undermine the objectives of financial autonomy. This includes ensuring that funds are not funneled into joint state-local government accounts or diverted for unauthorized purposes.
“These chairmen are now fully accountable for the financial decisions made within their councils,” the source said. “There is no room for excuse anymore. The money will go directly to them, and they will be held responsible for how it is used.”
This new initiative is seen as a critical step in ensuring that local governments can effectively serve their communities. It is expected that the direct allocation of funds, combined with stringent oversight mechanisms, will help reduce corruption and improve service delivery at the grassroots level.
“The transparency that this initiative brings will strengthen the democratic process and improve governance at the local level,” the source concluded. “It’s a game-changer for Nigeria’s democracy, as it ensures that the resources allocated to local governments are used for the benefit of the people, not siphoned off for personal or political gain.”
The opening of these dedicated accounts is just the beginning of a long-term effort to reassert the financial independence of local governments. As the accounts are set up and the disbursement process begins, all eyes will be on the chairmen to see whether they can manage these funds effectively and deliver much-needed services to their constituents.
In the coming months, local government chairmen will face intense scrutiny, and the success of this initiative will largely depend on their ability to adhere to the principles of transparency, accountability, and good governance.
