Mike Ozekhome, Senior Advocate of Nigeria, has encouraged governors, the federal government, and local government council chairmen to open bank accounts for Nigeria’s 774 local government areas.
In a statement seen by THE NEWS CHRONICLES on Thursday, he voiced his opinions and clarified that opening accounts would follow the Supreme Court’s ruling, which mandated that the money owed to the LGAs be paid to them directly from the Federation Account.
TNC reports the Supreme Court decision was a significant shift from previous precedents, which included a joint account between the LGA and state governments that was handled by the latter.
How to apply the Supreme Court’s decision on FAAC allocations to LGAs
TNC previously reported that the Supreme Court’s decision followed the federal government’s lawsuit, which sought relief against local government autonomy as well as to stop the governors of 36 states from spending or manipulating the 20.6% allotment from the federation account to local government areas.
The allocations to combined state and local government accounts, according to the top court, were only historical procedural customs. It made clear that the 1999 Constitution did not mean for governors to keep money because of LGAs.
Among other decisions, the Supreme Court held that the Federation could pay democratically elected Local Government Councils directly with the funds allotted to and credited to them in the Federation Account.
Ozekhome responded to the news by saying that it is not impossible to comply with the aforementioned judgment.
He went on to say that the unpleasant mischief the ruling of the Supreme Court intended to remedy was the state governors’ refusal to submit to the LGCs.
He clarified that the judgment’s orders, phrases, and content are all quite clear-cut and unequivocal.
He stated that the FG, the states, and the LGCs must abide by the judgment, which requires the direct payment of FAAC allocations to the LGCs, and that they must do so by opening bank accounts for the LGCs to facilitate the subsequent payment of their monthly obligations.
He stated: “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.”
“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.”
According to him, following the ruling would provide Nigeria with true fiscal federalism and serve the interests of justice.
What to Note
The Federation Accounts Allocation Committee (FAAC) divided N1.354 trillion in June revenue among the federal government, the states, and Local Government Councils (LGCs) in the wake of the Supreme Court’s decision.
This allocation took place on July 25, 2024, at the FAAC meeting in Abuja, which was presided over by the Finance Minister and Coordinating Minister of the Economy Wale Edun.
Edun told the media that the Supreme Court ruling could not be put into effect at that moment because Lateef Fagbemi, the Attorney-General of the Federation, had not yet received the actual procedures for approval and execution.
He assured that the Supreme Court’s ruling on local governments would be faithfully carried out, saying, “They were not in the hands of the Attorney-General for him to start implementing.”
Lateef Fagbemi (SAN) promised in a recent forum to see to it that any local government chairpersons or council members in office who tamper with the Federation Accounts Allocation Committee’s (FAAC) allocations to the LGs are prosecuted.
