FG Clarifies Delay in CBN’s Direct Funding to LGAs Despite Supreme Court Ruling

The Federal Government has clarified why the Central Bank of Nigeria (CBN) has not yet begun disbursing funds directly to the 774 Local Government Areas (LGAs), despite a Supreme Court ruling supporting local government autonomy.

Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, along with the CBN’s Director of Legal Services, Kofo Salam-Alade, explained that the necessary frameworks and procedures for direct funding are still being finalized.

Speaking at a forum organized by the Nigerian Bar Association (NBA) on local government autonomy, Fagbemi stated that a committee was established after the Supreme Court’s ruling on July 11, 2024. The committee, which includes representatives from the Federal Government, the Association of Local Governments of Nigeria (ALGON), and the Nigerian Governors Forum (NGF), is tasked with developing a structured system for direct allocation payments.

He emphasized that President Bola Tinubu’s administration took legal action against the 36 state governors to uphold local government autonomy. However, he expressed concern that some state governments are still unlawfully dissolving elected local councils, warning that such actions could have serious legal consequences.

On his part, CBN’s Legal Director, Salam-Alade, noted that the central bank does not have direct banking relationships with local governments. He explained that ongoing efforts are being made to verify account signatories and finalize documentation, assuring that the process will be completed swiftly once all necessary requirements are met.

However, ALGON representative Sam Akala stated that he had not received any official communication from the CBN regarding the opening of accounts for direct fund transfers. Despite this, he reaffirmed ALGON’s commitment to ensuring grassroots development.

NBA President Mazi Afam Osigwe also addressed the forum, highlighting the importance of democratic governance at the local level. He warned that mismanagement of local government funds could lead to broader national issues if not properly addressed.