Most Nigerians have persistently craved for change in the local government system as presently constituted for them to meet the two primary objectives as spelt out in the landmark Local Governments Reform of 1976, which are to promote participatory democracy and rapid socio-economic development at the grassroots.
While most analysts blame the nation’s faulty federal structure for the failure of the councils, others are of the view that the joint account run by the states and local governments is to be blamed for inability of the local government areas to meet their primary objectives. Section 7(1) of the 1999 Constitution (as amended) guarantees a system of local government by democratically elected government councils. However, the second component of the section makes the establishment, structure, composition, finance and functions of the local governments dependent on state laws.
The constitution also makes it possible for state governments to maintain a firm grip on the councils by routing funds standing to their credit in the Federation Account through states/local governments’ joint accounts rather than directly to them. This arrangement has over time, adversely affected the financial viability of the local governments. It is against this backdrop that some stakeholders have continued to call for the scrapping of the joint accounts to make way for financial autonomy for the councils but the states have continued to resist this move.
Under the constitution, the federal and state governments are the federating units, while the 774 local government areas are administrative units of the states. This, perhaps, explains why attempts by the Federal Government in the past to check use of funds in the joint accounts operated by the states and local governments as slush funds failed to yield desired results.
Whereas it was argued at inception that the operation of the joint accounts was meant to bring even development to all parts of the country and to curb corruption, the arrangement has over time, adversely affected the financial viability of the councils as some state governments have continued to make inexplicable deductions from the accounts. Section 162 (8) of the Constitution, which explains how the amount standing in the account should be distributed to the local governments in each state, provided that “the amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.”
Sadly, this constitutional provision has continued to be breached as reports from across the country have it that some governors hand out only wage bills to the various council chairmen in their respective states, who, in most cases, are appointed rather than elected as required by the law. Immediate past President Muhammadu Buhari, in December 2022, confirmed the breach, when he accused some governors of unbridled ill-treatment of local governments’ administration and mismanagement of resources of the councils, causing what he termed stunted development experienced at the third tier of government and unfair labelling of his administration at the grassroots.
The then president, who bared his mind after he delivered a speech at an event hosted for members of the Senior Executive Course 44 (2022) of the National Institute for Policy and Strategic Studies (NIPSS) at the Presidential Villa, Abuja, cited a personal experience involving a governor he did not name. Buhari said it beats anyone’s imagination how some governors would collect money on behalf of local councils in their states, only to remit just half of such allocation to the chairman, who would further deplete the remittance in further pilfering of public resources.
“If the money from the Federal Government to local government is N100 million, N50 million will be sent to the chairman, with a letter that he will sign that he received N100 million. The governor will pocket the balance and share it with whoever he wanted to and then the chairman of the local government will see how much he must pay in salaries. To hell goes development. Monies for the salaries will be given and the balance he will put in his pocket. This is what is happening.”
FG sues governors, seeks full autonomy for LGs
While there is no doubt that efforts in the past to free the local governments from the grip of state governors did not materialize, the present administration, led by President Bola Tinubu, appears determined to ensure financial autonomy for the councils given the lawsuit it filed against the governors of the 36 states of the federation at the Supreme Court over alleged misconduct in the administration of local governments.
In the suit marked: SC/CV/343/2024, which was filed by the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), the Federal Government is not only demanding full autonomy for the 774 councils as the third tier of government but an order deterring state governors from embarking on unilateral, arbitrary and unlawful dissolution of democratically elected local governments leadership.
It also seeks an order permitting the funds standing in the credits of local governments to be directly channeled to them from the Federation Account in line with the provisions of the Constitution as against the alleged unlawful joint accounts created by governors. The Federal Government equally prayed the Supreme Court for an order stopping governors from further constituting caretaker committees to run the affairs of local governments as against the Constitutionally recognized and guaranteed democratic system.
It also applied for an order of injunction restraining the governors, their agents and privies, from receiving, spending or tampering with funds released from the Federation Account for the benefits of local governments, when no democratically elected local government system is put in place in the states. In the 27 grounds it listed in support of the suit, the Federal Government argued that Nigeria, as a federation, was a creation of the 1999 Constitution, as amended, with the president as head of the federal executive arm, swearing on oath to uphold and give effect to provisions of the Constitution.
It told the apex court: “That the governors represent the component states of the Federation with executive governors who have also sworn to uphold the Constitution and to at all times, give effect to the Constitution and that the Constitution, being the supreme law, has binding force all over the Federation of Nigeria. “That the Constitution of Nigeria recognizes federal, states and local governments as three tiers of government and that the three recognized tiers of government draw funds for their operation and functioning from the Federation Account created by the Constitution.”
Consequently, the government asked the Supreme Court to invoke sections 1, 4, 5, 7 and 14 of the Constitution to declare that state governors and the states House of Assembly are under obligation to ensure a democratic system at the third tier of government in Nigeria and to also invoke the same sections to hold that the governors cannot lawfully dissolve democratically elected local government councils.
It further prayed for the invocation of sections 1, 4, 5, 7 and 14 of the Constitution to declare that dissolution of democratically elected local government councils by the governors or anyone using the state powers derivable from laws enacted by the State Houses of Assembly or any Executive Order, is unlawful, unconstitutional, null and void. In a 13-paragraph affidavit that was deposed to by one Kelechi Ohaeri from the Federal Ministry of Justice, the AGF said he filed the suit under the original jurisdiction of the Supreme Court on behalf of the FG.
The deponent averred that the local government system recognised by the Constitution is a democratically elected local government councils, adding that the amount due to local government Councils from the Federation Account is to be paid to local government system recognized by the constitution. Meanwhile, the Supreme Court, on Thursday, gave the 36 state governors seven days to file their defence, while the AGF was given two days to file his reply upon receipt of the governors’ defence.
A seven-man panel of the apex court led by Justice Lawal Garba, issued the order, while ruling in the application for abridgment of time argued by Fagbemi. He held that the decision of the court was predicated on the national urgency of the suit and the non-objection from the Attorneys-General of the states of the federation. The apex court held that filing of all processes and exchanging of same must be completed within the time. The court also ordered all state Attorneys-General absent to be present in court on the adjourned date.
The eight states, whose Attorneys General were absent in court despite being served with hearing notice are Borno, Kano, Kogi, Niger, Ogun, Osun, Oyo, and Sokoto. The Attorney General of Ebonyi state and the chairman of, the body of state Attorneys-General, Dr. Ben Odo, who spoke on behalf of his colleagues, said they had a meeting and he has their consent of no objection to the suit. “I have the consent of all the Attorneys General not to oppose the motion,” he said.
Previous bids to free LGs from states control
There is no doubt that efforts were made in the past to free the local councils from the grip of state governors but they hit the rocks. For instance, The 7th National Assembly, through the House of Representatives, initiated a bill for an Act to amend not only provisions of section 7 of the Constitution, but section 162 in order to provide for independence and financial autonomy of the local governments.
The bill, sponsored by the then member representing Anaocha/ Njikoka/Dunukofia federal constituency of Anambra State, Uche Ekwunife, sought to amend both sections to give the local governments’ independence and financial autonomy. Ekwunife had in her presentation of the bill at that time, lamented the level of underdevelopment at the local governments across the country, owing to neglect by the various state governments.
She queried the need for the councils if the only exist to pay salaries. While the bill passed second reading and was consequently committed to the House adhoc Committee on Constitution Review for further legislative action, but nothing meaningful came out of it. A proposal by the then Peoples Democratic Party (PDP)-led Federal Government for the scrapping of the joint accounts also suffered the same fate. The PDP administration at that time said it would not tolerate diversion of funds meant for the development of the grassroots but the then main opposition party, Action Congress of Nigeria (ACN), advised then President Goodluck Jonathan to jettison the proposal.
The party argued that scrapping the accounts and allocating the councils’ share from the federation account directly to them would amount to making them federating units. It was therefore not surprising when state Houses of Assembly voted against the proposal for financial autonomy for the local councils during the constitution amendment by the 7th National Assembly.
It was another botched bid in 2017, during another amendment to the constitution. Whereas the Senate and House of Representatives voted in favour financial autonomy the local councils, the states Houses of Assembly turned down the proposal. The Senate, in particular, not only voted for alteration to section 162 of the Constitution to abrogate the state/ local joint accounts and empower each local government to maintain its own “special account into which all allocations due to the council shall be directly paid from the Federation Account and from the government of the state,” it equally favoured a review the constitution to make democratic composition of local councils statutory.
This was aimed at ensuring that any local government without elected officials would not get federal funding. While commendations trailed the position of the federal legislators at the time, some discerned minds, cautioned that it was not yet Uhuru given the rigorous amendment process to the Nigerian constitution. The constitution requires approval of two/ thirds of the state legislatures even after an amendment is passed by both chambers of the National Assembly.
It was against this backdrop that that the proposed amendments as voted for by the National Assembly were sent to the 36 state Houses of Assembly for consideration and concurrence. But as envisaged, the amendment that would have freed the local councils from the grip of the states failed to scale the hurdle at the state level. Twenty-seven out of the 36 states of the federation rejected autonomy for the local governments, while only nine endorsed the proposal.
The states that gave yes votes were Ogun, Ondo, Niger, Benue, Plateau, Bauchi, Cross River, Kwara and Bayelsa. Perhaps, only a few would have expected that the state legislators will concur with their federal counterparts given the grip governors have on them. Then National President of National Union of Local Government Employees (NULGE), Ibraheem Khaleel, who acknowledged that the proposal for autonomy for the councils would be a hard sale, accused some All Progressives Congress (APC) governors of influencing members of their states Assembly to reject the bill.
The 9th National Assembly also made efforts at granting autonomy to the local governments during its amendment to the Constitution. Its constitution review committees headed by Ovie Omo-Agege (Senate) and Ahmed Idris Wase (House of Representatives) accorded priority to to the issue, so it was not surprising that members of both chambers of the federal legislature voted overwhelmingly in support of the bill after a clause-by-clause consideration of the recommendations of the Joint Committee on the 1999 Constitution (5th Alteration) Bills, 2022.
Ninety-two out of the 109 senators voted in favour of the local government autonomy bill in the Red Chamber, while 257 out of 360 voted in support in the Green Chamber. The legislation was entitled: “Bill for an Act to alter the Constitution of the Federal Republic of Nigeria, 1999 to abrogate the state joint local government account and provide for a special account into which shall be paid all allocations due to local government councils from the Federation Account and from the government of the state; and for related matters.”
According to the bill, “each local government council is to create and maintain its own special account to be called Local Government Allocation Account into which all the allocations will be paid.” The bill also mandates each state to pay to local governments in its area of jurisdiction such proportion of its Internally Generated Revenue (IGR) on such terms and in such manner as may be prescribed by the state House of Assembly. On administrative autonomy, the bill sought to allow local governments to conduct their own elections.
While it was commendations for members of the National Assembly for passing the Local Government Autonomy Bill, the states Assembly, again, rejected the proposal. Incumbent National President of NULGE, Ambali Olatunji, who described the developments as a deliberate act by the governors and the state Houses of Assembly to deny the grassroots of effective leadership, bemoaned insistence of most of the governors to run affairs of the councils with transition chairmen.
He said these have created room for the diversion of resources available for meaningful growth and development at that sub-national level by the governors. On the way out, he said: “The Federal Government must have the courage to take punitive action against such violation of Section 7 of the 1999 Constitution as amended. There are many court judgements against this even by the Supreme Court that outlaw such illegality.”
The NFIU law
What seemed a temporary relief after the botched bids to grant autonomy to the councils came when the Buhari administration announced a new order to make it compulsory for all allocations meant for the local governments to go straight to their respective banks account. The directive was aimed at ensuring that the joint account system only exists for the receipt of allocations from the federation account but not for disbursement.
The decisions contained in a guideline released by the Nigerian Financial Intelligence Unit (NFIU) after a meeting with officials of the various commercial banks, was entitled: “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria, effective June 1, 2019.”
Though the directive was applauded, a legal hurdle was anticipated as section 162 (8) of the Constitution empowers the states to distribute allocations “among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.” As predicted, the Nigerian Governors Forum (NGF) sued the Federal Government and NFIU for interfering on the power of state governments to initiate transactions on the joint accounts.
However, the Federal High Court, Abuja, dismissed the suit. Justice Inyang Ekwo, who delivered judgement on the suit, marked: FHC/ ABJ/CS/563/2019, held that the case of the plaintiffs lacked merit. According to the judge, the plaintiffs did not show how the NFIU’s guidelines contradict or conflict with the provision of sections 7(1), (6) (a) and (b) of the constitution.
“I am unable to see how the provisions of the 2nd defendant (NFIU)’s guidelines contradict or conflict with the provisions of section 162(6) of the constitution which creates the ‘State Joint Local Government Account’ into which allocations to the local government councils of the state from the Federation Account and from the government of the state shall be paid,” he held.
The court further held that the guidelines did not contradict section 162(8) of the constitution which prescribed that the amount standing to the credit of the local government council of the state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state. Despite the NFIU’s threat of sanctions and the judgement of the court, there is no doubt that the states still maintain their firm grip on the finances of the councils.
Arguments for and against autonomy for LGs
The debate over autonomy for the councils has been a recurring decimal but some political stakeholders have always insisted that as a federal state, Nigeria has three tiers of government – federal, state and local – whose intergovernmental relations, which include political, financial, judicial and administrative, are established by the constitution. They further maintained that each tier is required to operate within its area of jurisdiction and any action to the contrary is null and void to the extent of its inconsistency with the law.
This, they claimed, guarantees the autonomy of each tier. This positions, notwithstanding, there are other stakeholders, including NULGE, who have persistently called for urgent steps to be taken to save the local governments from extinction. NULGE, for instance, solicited the support of former President Olusegun Obasanjo (initiator of the 1976 Local Government Reform) in 2018 to rescue the councils from the governors.
Obasanjo, who agreed with the union that state governments have incapacitated the councils, wondered whether the states could allow the federal government to do the same to them. His words: “There is no exception to this encroachment by states. Even though both are supposed to be separate tiers of government, with each having its roles and functions, that is not the case anymore. I wish I could help, but I am helpless. As it is, I can only help you to shout and talk to the world.
“I do not have any executive or legislative power. I am crippled. But we shall continue to talk until those who are reasonable among them change this attitude. I begin to wonder if they (states) can allow what they are doing to the local governments to be done to them.” Another former leader, who once voiced out against the structural defect at the local government level is ex-Military President, General Ibrahim Babangida. He maintained that financial autonomy for the councils is the only way to the nation’s rapid development.
Babangida maintained that development would be even and sustained if allocations meant for the various local governments are released to them directly although he added that they should be made to account for how the funds are spent by way of monitoring the various projects initiated and executed to maintain quality. A former Minister of Finance, National Planning and Transport, Dr. Kalu Idika Kalu, who shares Babangida’s view told New Telegraph in an interview that Nigeria get the structure of the local government right for efficient development of the country.
His words: “Let’s get the structure of the constitution right; let’s get the structure of our local governments right, let’s focus more on development units as I have advocated for years. This issue of geopolitical zones has been rubbished over the years. What really counts is that everybody comes from a local government. So, we should divide up the country into local governments that will be capable to take up any function.
After that, whether it is state or zone will be of less important. “So, my emphasis is: Let’s restructure the constitution, restructure the local governments in such a way that they will be more or less equal, let’s say 50,000 or 60,000 people per local government across the entire states, and maybe we will get less half the number of local governments that we have now. From there, we can organise them into states and geopolitical zones.” The governor of Anambra State, Charles Soludo, who slightly deferred on recognition of local governments as a tier of government, however called for their strengthening based on the unique needs of each state.
His words: “The way the constitution is written is one thing, but whether what the constitution states is efficient or it is the best is another question. What we do in Anambra State is that we strengthen the local governments, so that they would give the people the dividends of democracy. “We rely on the local governments to get what we are doing, be it in areas of waste management, street lights and its management, be it in the area of managing the environment, we are cascading what used to be done by the state down to the local governments.
We will strengthen and continue to strengthen the hands of the local governments, even if the designers of the constitution did not give them absolute autonomy.” However, the Senate, which is synch with President Tinubu in his bid to ensure autonomy for the local governments, has urged him to convene a national dialogue on the issue. The Senate said the dialogue should involve the governors, state legislators, local government officials, civil society organisations, community leaders and others.
The resolution was sequel to a motion sponsored by Senator Kawu Sumaila (NNPP, Kano South). The lawmaker, who lamented the neglect of the local government system in many parts of the country, accused state governors of frustrating autonomy for the local governments. His words: “Some governors play a crucial role in frustrating local government autonomy in Nigeria via constitutional alteration processes and with limited financial and operational autonomy, local governments might struggle to effectively address local security concerns like community policing initiatives, intelligence gathering and infrastructure maintenance.
“Local governments, once major employers, are financially constrained and unable to hire the necessary staff. The surge in unemployment creates a pool of vulnerable individuals susceptible to criminal recruitment, further exacerbating the nation’s security issues.” Leader of Yoruba sociocultural and political organisation, Afenifere, Pa Reuben Fasoranti, who also expressed support for President Tinubu’s administration on its move to grant autonomy to the local governments, said the move will help in repositioning Nigeria.
His words: “It’s undebatable that local government is the closest to the people. For, it is through it that the people at the grassroots can effectively feel the impact of the government. “As the situation is presently, however, the tight grip that state governors have on local governments is seriously denying the people of the benefits they should, by right, be deriving from their local governments,” he added.
However, a professor of Law, Samuel Dike, who faulted the Federal Government’s decision to sue the 36 states in its bid to institutionalise local government autonomy, argued that it is proper to solve the fundamental problem from the root by ammending the relevant section of the constitution, rather than seeking a judicial interpretation on the matter.
Lagos State governor, Babajide Sanwo Olu, who posited that his state should have been left out of the legal action instituted by the Federal Government against governors at the Supreme Court over alleged misconduct in the administration of local governments explained that it was a legal anomaly to join Lagos in the matter decades after the local governments in the state have been enjoying full autonomy.
Noting that the Attorney General of the Federation should have identified those that were not in compliance with the law, before filing a blanket lawsuit against all states, Sanwo-Olu who supported the suit, said infringement on local council autonomy is an insult to the spirit of the Constitution to which the judiciary must make a clear interpretation for equity and fairness.
He said: “It is interesting to read the news that the Minister of Justice and Attorney General of the Federation has sued all the 36 states because governors did not give autonomy to the third tier of government. The only mistake, which I am going to tell our Attorney General, is that some of us are in compliance.
“The Attorney General should have done his due diligence to identify which states are not in compliance, so that we don’t sue all the 36 states together. You can determine which states are not violating the Constitution. If it is three, four or five states in compliance, then you can sue the 31 states violating the autonomy of the local governments. That is part of the back work that we need to do.”
Fears over the states
While many are optimistic the President Tinubu will have his way given the way he has been able to push some of his policies and programmes, there are fears in some quarters that move grant autonomy to the local governments may be hard sale. Chairman of the Conference of Speakers of State Houses of Assembly in Nigeria, Adebo Ogundoyin, who dropped an indication to this, said the various states of the federation may not allow local governments to have administrative and financial autonomy because of the fear that the Federal Government may use the local government against them.
Ogundoyin, who spoke at a national discourse on Nigeria’s security challenges and good governance at the local government levels organised by the House of Representatives, said granting financial autonomy to that level government will engender massive corruption at the local level. He argued that the Economic and Financial Crimes Commission and other anti-graft agencies will not have the required manpower and financial resources to investigate corruption at the local level.
He said: “I will like us to consider different scenarios for the purpose of this discourse. Let us imagine a system of government that operates financial autonomy for local governments. Some of the problems I foresee would afflict the local governments if financial autonomy is granted include inadequate resources, especially in urbanised local governments. “This is going to be closely followed by mismanagement or misappropriation of funds or put simply as corruption.
The local governments will be answerable to the Federal Government and other federal agencies, for example EFCC, House of Representatives which will have oversight functions over the council. “Then, there is the issue of accountability and transparency, which is already a challenge at both national and sub-national levels. Going by what we see during oversights, these problems already persist in an incapacitated local government system. One can only imagine the extent of these problems once there are more resources given to them directly.”
While many Nigerians have continued to wonder how the seeming ambiguities in the Constitution, which have aided the state governments to divert funds meant for the local councils would be tackled, it is left to be seen if the Tinubu administration and the 10th National Assembly led Senator Godswill Akpabio will be able to convince the governors and state Houses of Assembly to support autonomy for the councils.