Ozekhome calls for LGAs accounts amid FAAC allocation dispute

Senior Advocate of Nigeria, Mike Ozekhome, has urged governors, the federal government, and local government council chairmen to open bank accounts for Nigeria’s 774 local government areas (LGAs).

This move would align with a recent Supreme Court judgment mandating that funds from the Federation Account be paid directly to LGAs, bypassing the previous joint accounts controlled by state governments.

The Supreme Court’s ruling marked a significant shift, emphasizing that allocations to LGAs should not be managed by state governors. This decision followed a federal government suit aimed at preventing state governors from interfering with the 20.6% allocation intended for LGAs.

Ozekhome highlighted that the judgment’s directives are clear and must be enforced. He suggested that the federal, state, and local governments meet to establish procedures for opening the necessary bank accounts, ensuring direct payment to LGAs.

“The answer is equally simple. The FG, states, and LGCs should now meet (and I am told they have been meeting) at FAAC and decide on modalities and procedures for opening accounts for LGCs so that their allocation under section 162 of the 1999 Constitution is paid directly to them and not to the joint state LG account that is oftentimes waylaid by state governors and fleeced without the helpless LGCs being able to raise a finger.

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“The apex court had declared emphatically that, ‘by virtue of section 162(3) and (5) of the Constitution of Nigeria, 1999, the amount standing to the credit of LGCs in the Federation Account shall be distributed to them and be paid directly to them’; that a state, either by itself or governor or other agencies, has no power to keep, control, manage, or disburse in any manner, allocations from the Federation Account to LGCs.”

He stated that compliance with the judgment is in the interest of justice and would bring true fiscal federalism to Nigeria.

This, he argued, would promote true fiscal federalism in Nigeria and address the misuse of funds by state governors.

In line with this ruling, the Federation Accounts Allocation Committee (FAAC) distributed N1.354 trillion in June revenue among the federal government, states, and LGAs. However, the implementation of the Supreme Court judgment has been delayed, pending the Attorney-General’s review.

The Attorney-General, Lateef Fagbemi, has assured that the judgment will be faithfully implemented, with strict measures against any local government officials tampering with the allocations.

Following the Supreme Court verdict, the Federation Accounts Allocation Committee (FAAC) distributed N1.354 trillion in June revenue among the Federal Government, states, and Local Government Councils (LGCs).

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This distribution occurred during the July 25, 2024, FAAC meeting in Abuja, chaired by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

Edun informed the press that the Supreme Court judgment could not be implemented at that time because the actual proceedings had not yet been handed down to the Attorney-General of the Federation, Lateef Fagbemi, for review and implementation.