FG to Begin Direct Payments to Local Govts From January

The federal government is set to begin directly disbursing funds to local governments from the end of January 2025, a significant shift aimed at enhancing local government autonomy and financial independence.

The announcement was made by Sunday Dare, the Special Adviser to President Bola Tinubu on Media and Public Communications, during a television interview on Thursday evening.

In July 2024 the Supreme Court had declared the practice of states controlling local government funds unconstitutional. The ruling delivered by Justice Emmanuel Agbim, mandates that allocations to local governments should be paid directly by the Federal Government or, if routed through states, should ensure financial autonomy. This comes after a suit was filed by Nigeria’s Attorney General, Lateef Fagbemi (SAN), advocating for a reform that would grant financial independence to the country’s 774 local government areas.

Dare confirmed that the necessary mechanisms to implement this direct payment system are now in place, allowing local councils to begin receiving their full allocations directly from the Federal Allocation Account Committee (FAAC) by the end of January.

“This is a major win for local governments. For instance, one chairman I spoke to said they will now receive N2.9 billion instead of the N200 million they were previously allocated,” Dare explained, emphasizing that this financial empowerment will help local governments better serve their communities.

The new policy is part of President Tinubu’s broader agenda to ensure that local governments have greater control over their finances, which have long been subject to manipulation by state governments. Dare also stressed the need for greater scrutiny of how state and local governments manage public funds.

Critics argue that while direct payments may reduce state interference, there is still a need for strong oversight to ensure that the funds are used effectively.