- Supreme Court Mandates Direct Payment of Councils’ Allocations
- Councils Must Have Elected Officials to Receive Funding
- 479 out of 774 Councils Denied Access to Federation Account Funds
Supporters of local government autonomy achieved a significant win yesterday with the Supreme Court ruling to strip governors of financial authority over councils.
The highest court effectively liberated the third tier of government from state government control, prohibiting governors from managing or utilizing allocations intended for local governments.
In its judgment, a seven-member panel declared it unlawful for state governments to withhold and spend statutory allocations meant for local governments, emphasizing that such funds should be managed by elected officials.
The court declared as gross misconduct the dissolution of democratically elected local governments by governors, whose responsibility, under Section 7 (1) of the Constitution, is to ensure their existence.
It barred the Federal Government from releasing funds to local governments managed by undemocratically elected officials, such as caretaker committees.
The judgment was on suit SC/CV/343/2024 filed on behalf of the Federal Government by the Attorney-General of the Federation (AGF) Lateef Fagbemi (SAN), with all the 36 state attorneys-general as defendants.
The Supreme Court, in the lead judgment by Justice Emmanuel Agim, held that the suit had merit. It granted all the reliefs sought.
The apex court issued an order of injunction restraining the defendants by themselves, their privies, agents, officials or howsoever called, from receiving, spending or tampering with funds released from the Federation Account for the benefit of local government councils when no democratically elected local government system is in place.
The court also ordered the Federal Government, through its relevant officials, to commence immediately the direct payment to local government councils the amount standing to their credit in the Federation account.
It ordered that henceforth, no state government should be paid any money standing to the credit of the local governments in the Federation account.
The apex court also issued an order of immediate compliance by the states through their elected or appointed officials and public officers with the terms of the judgment and orders.
Successive state government officials and public officers must also comply, it held.
Justice Agim faulted the contention of the states that allowing the Federal Government to pay allocations directly to the LGAs would amount to a breach of the provisions of Section 162 (5) & (6) of the Constitution, requiring that such allocations must be paid through the states.
The sub-sections provide: “The amount standing to the credit of local government councils in the Federation Account shall also be allocated to the State for the benefit of their local government councils on such terms and in such manner as may be prescribed by the National Assembly.
“Each state shall maintain a special account to be called ‘State/Joint Local Government Account’ into which shall be paid all allocations to the local government councils of the State from the Federation Account and from the Government of the State.”
Justice Agim noted that where the literal and narrow interpretation is adopted in constructing the word “shall” in sub-section 5, it will impose a mandatory duty on the Federation to pay local governments statutory allocations from the Federation account only through the states.
Justice Agim added that where such literal and narrow interpretations will cause injustice or create an unworkable situation, a purposive or teleological interpretation should be adopted to allow for discretion on the part of the Federation in determining the most appropriate mode of paying the allocations of the LGAs to them.
He said the adoption of a purposive interpretation would mean that the Federation could pay Local governments’ allocations to them either directly or pay to them through the states.
He added: “In this case, since paying them through states has not worked, the justice of this case demands that the local government allocations from the Federation account should henceforth be paid directly to the LG councils.
On whether state governments or governors could lawfully dissolve democratically elected local government councils, Justice Agim held that it is a mandatory duty of the state government or governor, under Section 7(1) of the Constitution, to ensure their existence.
He said what obtains today is that the states, in the abuse of their powers, have continued to work against that provision of the Constitution.
Referring to past decisions of the court, Justice Agim held that a democratically elected local government does not exist at the pleasure of the governor or the House of Assembly.
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He added it was common knowledge and needs no proof that governors want to hold on to and manage council allocations and, therefore, do not want the existence of democratically elected chairmen.
Justice Agim noted that the governors also do not want to leave council allocations to the control of elected chairmen.
He added: “Therefore, their unconstitutional takeover of the control and management of the local government allocations from the Federation account is the impetus for their preference for caretaker committees or by whatever name call over democratically elected local governments and their refusal to build the capacity of the State Independent Electoral Commissions to be independent enough to hold truly democratic elections.
“They create the absence of democratically elected councils by not allowing the State Independent Electoral Commission to conduct local government elections and use that as an excuse to appoint caretaker committees or administrators or dissolve democratically elected local government councils and appoint caretaker committees or administrators. Such appointments cannot be justified in any sense.”
According to the jurist, under the Constitution, a state government or a governor has no power to constitute, appoint or determine a local government other than as prescribed in Section 7(1) of the 1999 Constitution.
The section provides: “The system of local government by democratically elected local government councils is under this Constitution guaranteed; and accordingly, the Government of every State shall, subject to Section 8 of this Constitution, ensure their existence under a Law which provides for the establishment, structure, composition, finance and functions of such councils.”
Justice Agim declared that the 36 states, acting through their governors and or Houses of Assembly, are under obligation to ensure democratic governance at the third tier of government, namely at the local government level.
He also declared that the states, governors or Houses of Assembly, cannot, using state power derivable from laws enacted by the state Houses of Assembly or Executive Orders or other actions, anyhow so-called, lawfully dissolve democratically elected local government councils within the same state and replace with caretaker committees or whatever they are called.
Justice Agim declared as unlawful, unconstitutional, null and void the dissolution of democratically elected local government councils using powers derivable from laws enacted by the Houses of Assembly or executive orders.
He declared that a state government or the governor of a state has no power to constitute or appoint a caretaker for a local government other than as prescribed by Section 7 (1) of the Constitution.
The Supreme Court granted the following reliefs:
*A declaration that the amount distributed to and standing to the credit of the local government councils in the account of the Federation can be paid by the Federation directly to democratically elected Local Government councils since the states that have been collecting same for them have persistently refused to hand over the money to the owner, but rather retain them.
*A declaration that the amount distributed to and standing to the credit of the local government councils in the Federation account must be paid by the Federation to only democratically elected local government councils and no other body.
*A declaration that any elected official of the 36 states, who through the instrumentality of either a state law or executive directive or order, dissolve or cause the dissolution of any of the democratically elected local government councils has gravely breached the provisions of the Constitution of the Federal Republic of Nigeria and has by that token committed a gross misconduct.
*A declaration that by virtue of Section 162(3) and (5) of the Constitution, the amount standing to the credit of the Local Governments in the Federation account should be distributed to them or paid directly to them, the reason being that the state, either by itself or the governor or other agency has no power to keep, control, manage or disburse in any manner allocation from the Federation for the Local Governments.
*A declaration that the former practice of the state in keeping, controlling, managing and disbursing local government councils’ allocations from the Federation account is unconstitutional and illegal.
*A declaration that a local government council is entitled to a direct payment from the Federation account of the amount standing to its credit in the said Federation account since the state governments have persistently refused or failed to pay the amount received on their behalf to them.
Tijani Gazali (SAN), Director of Civil Appeals at the Federal Ministry of Justice, who represented the AGF in court, thanked the Supreme Court for finally proclaiming financial autonomy for the local government councils.
“My lords, on behalf of the federation, we thank the court for finally putting this issue to rest,” Gazali added.
Attorney-General of Abia State, Ikechukwu Uwanna (SAN), his counterparts in Adamawa and Akwa Ibom states – Afraimu Jinji (SAN) and Uko Essien Udom (SAN) noted that although the decision did not go in their favour, they will have to abide by it since the Supreme Court is the final court in the land.
Tinubu hails verdict
President Bola Ahmed Tinubu hailed the verdict, saying it aligned with his administration’s Renewed Hope Agenda, which prioritises the people’s interests.
He stressed that the onus is now on local council leaders to ensure that the broad spectrum of Nigerians living at that level are satisfied that they are benefitting from people-oriented service delivery.
According to a statement by his Special Adviser on Media and Publicity, Ajuri Ngelale, the President hopes that council funding will now be transparent and services provided without excuses.
He hailed the judgment as a significant step towards restructuring the country and economy, making Nigeria a better and fairer society for all.
The statement reads in part: “The Renewed Hope Agenda is about the people of this country, at all levels, irrespective of faith, tribe, gender, political affiliation, or any other artificial line they say exists between us. This country belongs to all of us.
“By virtue of this judgment, our people – especially the poor – will be able to hold their local leaders to account for their actions and inactions. What is sent to local government accounts will be known, and services must now be provided without excuses.
“My administration instituted this suit because of our unwavering belief that our people must have relief and today’s judgment will ensure that it will be only those local officials elected by the people that will control the resources of the people.
“This judgment stands as a resounding affirmation that we can use legitimate means of redress to restructure our country and restructure our economy to make Nigeria a better place to live in and a fairer society for all of our people.”
President Tinubu noted that the provision of some essential amenities and public goods, such as the construction and maintenance of certain roads, streets, street lighting, drains, parks, gardens, open spaces, and other residual responsibilities, including community security, have tottered due to the emasculation of local governments.
The President affirmed that the decision of the Supreme Court to uphold the constitutional rights and ideals of local governments as regards financial autonomy, and other salient principles, is of historic significance and further reinforces the effort to enhance Nigeria’s true federal fabric for the development of the entire nation.
President Tinubu commended the AGF for his diligence and patriotic effort on this important assignment.
“This administration remains committed to protecting the principles of the charter governing citizens, institutions of government, arms, and tiers of government in furtherance of building an efficient and performance-driven governance system that works for every Nigerian,” the statement adds.
Senate President Godswill Akpabio, House of Representatives Speaker Abbas Tajudeen and Attorney-General of Federation Lateef Fagbemi all commended the verdict in separate statements.
The Association of Local Government of Nigeria (ALGON), Nigeria Union of Local Government Employees and National Councillors Forum of Nigeria(NCFN) gave kudos to the apex court for the landmark judgment, which according to them, will fast track development at the grassroots.
ALGON lauded the judgment as the “birth of a new democracy” in the country.
Local Government workers welcomed judgment affirming councils’ full autonomy , saying it signposted a ‘’new dawn to prosperity” at the grassroots.
NCFN hailed the judgment as the best thing that has ever happened since the return of democracy in 1999.
Not less than 479 out of the 774 local governments spread across 22 states are run by unelected officials and will henceforth go without allocation from the federation account in view of the apex court judgment.