BATTLE FOR AUTONOMY! NULGE Sounds Alarm Over CBN’s Alleged Collusion With Governors

BATTLE FOR AUTONOMY! NULGE Sounds Alarm Over CBN’s Alleged Collusion With Governors

The National Union of Local Government Employees (NULGE) has issued a strong warning to the Central Bank of Nigeria (CBN), urging it not to support state governors in obstructing the financial independence of local governments. This…BATTLE FOR AUTONOMY! NULGE Sounds Alarm Over CBN’s Alleged Collusion With Governors

comes amid reports that the apex bank has refused to open accounts for local councils due to alleged non-compliance with audit requirements.

Speaking to The ireporteronline on Sunday, NULGE National President Hakeem Ambali dismissed claims that local governments had not submitted two years of audited financial reports. He insisted that all councils have at least three years’ worth of audited accounts.

Ambali stressed that local governments are prepared to submit their records, enabling them to open accounts with the CBN as required under the landmark Supreme Court judgment that mandates the direct remittance of Local Government Allocations by the Federation Account Allocation Committee (FAAC).

“There is no local government without at least three years of audited accounts, thanks to the presence of Auditors-General at the local government level. The CBN must not act against the Supreme Court ruling or allow itself to be manipulated by state governors.”

Ambali urged the CBN to release a formal memo specifying the requirements for account openings, assuring that local governments would comply swiftly.

CBN’s Stance and Supreme Court Ruling

Reports indicate that some local governments have struggled to access their statutory allocations due to the CBN’s refusal to open accounts, citing missing audit records. However, the Supreme Court’s landmark ruling on July 11, 2024, ordered FAAC to remit funds directly to local government accounts, stripping state governors of control over these funds.

The ruling followed a lawsuit by Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, who challenged governors’ continued control over local government finances and their practice of dissolving elected councils in favor of caretaker committees.

In its judgment, the Supreme Court declared governors’ interference unconstitutional, ordering the Accountant-General of the Federation to directly disburse funds to the 774 local councils to ensure full financial autonomy.

Challenges in Implementation

Despite this ruling, delays persist. An auditor from a top firm in Abuja told The ireporteronlinethat the required audits could be completed within one to three months, depending on the auditing firms’ capacity.

This delay could prevent local governments from receiving direct allocations in February, potentially allowing states to retain control over the funds when FAAC disburses revenue for January.

While the CBN’s stance aligns with best financial practices, experts argue that it must also consider the urgency of local government funding.

“It is standard practice for entities to undergo audits, but this is not about obstruction—it’s about financial discipline. The CBN should issue a formal directive so that local governments can comply within a short timeframe,” the source added.

Persistent Issues in Fund Disbursement

From July to December 2024, FAAC allocated a total of ₦2.08 trillion to local governments, representing 24.9% of the total revenue distributed. However, despite the Supreme Court ruling, the funds were still deposited into state government accounts, sparking frustration among officials of the Association of Local Governments of Nigeria (ALGON) and NULGE.

Allocations to local governments increased by 72.06% compared to the previous year, rising from ₦1.206 trillion to ₦2.075 trillion. The highest disbursement occurred in December, marking a 13.2% increase from the previous month.

Yet, the lack of full compliance with the Supreme Court ruling remains a significant concern.

Federal Government’s Position

Finance Minister Wale Edun stated that while the Federal Government supports direct payments, some practical impediments have delayed implementation. A committee has been set up to assess the feasibility of the ruling.

Meanwhile, Attorney-General Lateef Fagbemi has issued a stern warning to state governors defying the judgment, threatening legal action for contempt of court. He also cautioned local government chairmen against misusing funds, emphasizing that autonomy should benefit the grassroots, not facilitate corruption.

ALGON Secretary-General Mohammed Abubakar expressed frustration over the delay in enforcing the ruling, saying:

“People who oppose local government autonomy are exploiting this delay. The Supreme Court ruling should not be ignored, yet we remain in the dark about the government’s actual stance.”