In a significant move to enhance transparency and accountability in Nigeria’s financial system, all 774 local government councils are set to open dedicated accounts with the Central Bank of Nigeria (CBN) for direct disbursement of funds from the Federation Account. This development, spearheaded by the Association of Local Governments of Nigeria (ALGON), aligns with the Supreme Court ruling affirming the autonomy of local governments.
ALGON’s National President, Bello Lawal Yandaki, highlighted the critical nature of this initiative, stating that the CBN is ready to facilitate the process as soon as the Federal Government issues the necessary directive. He assured that these accounts could be opened within 24 to 48 hours once the required instructions are given.
The Nigerian Financial Intelligence Unit (NFIU) will oversee the utilization of funds, ensuring that local government chairmen adhere to the principles of transparency, accountability, and good governance. Additionally, a team of anti-corruption agents from the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) has been constituted to prosecute any council officials involved in corrupt practices.
Despite delays in the disbursement of funds, Yandaki urged calm, attributing the holdup to administrative issues. According to him, many councils have yet to submit their bank details to the Federation Accounts and Allocations Committee (FAAC), a critical step for accessing funds. He assured stakeholders that efforts are underway to resolve these issues promptly, with January earmarked as the starting point for direct revenue allocations to local governments.
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During the January FAAC meeting, a total of N361.754 billion was allocated to local governments. However, the funds remain undistributed due to the failure of some councils to provide necessary banking details. FAAC officials have urged local governments to rectify these issues by the end of the month to ensure smooth allocation.
This reform is a direct response to the Supreme Court’s ruling affirming the financial autonomy of local governments, a decision celebrated as a milestone in Nigeria’s quest for good governance. Stakeholders, including labor unions and local government chairmen, have reached a consensus on the importance of this measure, signaling a new era of accountability and efficient resource management for local government administrations.
As the nation anticipates the resolution of administrative bottlenecks, this move is poised to revolutionize grassroots governance, ensuring that funds reach the councils directly and are utilized effectively to drive development across the country.
