Federal Government Directs States To Open Local Govt Accounts With Central Bank
These accounts are expected to be opened for all LGAs.
The Nigerian government under President Bola Tinubu has directed all states to open accounts for the local government areas (LGAs) with the Central Bank of Nigeria.
These accounts are expected to be opened for all LGAs.
SaharaReporters gathered that a circular to this effect was recently sent to states by the Office of the Accountant General of the Federation.
The signatories to the accounts are expected to be the local government chairman and the director of administration/finance (of each local government).
SaharaReporters exclusively gathered that it was ratified at the last Federation Accounts Allocation Committee (FAAC) meeting, held a few days ago, that a fresh circular would be sent to states to further update and reinforce the earlier directive mandating the creation of LGA accounts.
This development comes amid ongoing issues surrounding local government autonomy in the country.
In July 2024, SaharaReporters reported that the Supreme Court ruled that the Nigerian Government must pay funds allocated to local governments directly to the respective Local Government Areas, which are managed by democratically elected officials.
In a landmark judgment delivered by Justice Emmanuel Agim, the court declared that it is unconstitutional for state governments to withhold and utilise allocations meant for Local Government Areas without transferring the funds to them, as mandated by Section 162(3) of the Constitution.
This ruling aims to ensure that Local Governments receive their rightful allocations, promoting decentralisation and grassroots development.
SaharaReporters also reported in June 2024 that the Supreme Court had reserved its judgment in a lawsuit brought by the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), seeking local governments’ autonomy in the country.
A seven-man panel of the apex court, led by Justice Garba Lawal, made this known after hearing the case, in which all 36 state governors were named as defendants by the Federal Government.
The suit filed by Fagbemi sought full autonomy for the Local Government Areas in the country.
There have been concerns over the management of LGA funds by states, with many accused of siphoning the monies and failing to use them for actual development at the local government level, which is usually the grassroots.
