The Association of Local Governments of Nigeria (ALGON) has dragged the federal and 36 state governments to court over the implementation of local government autonomy and the sharing of revenue through the Federation Account Allocation Committee (FAAC).
In a suit registered as FHC/ABJ/05/353/2025, before a Federal High Court, Abuja, ALGON is demanding the inclusion of local government councils in the FAAC.
Joined in the suit as respondents are the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, Minister of Finance and Coordinating Minister of the Economy, Wale Edun; Minister of Budget and National Planning, Abubakar Bagudu; and the accountant-general of the federation.
Other respondents include the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), the Central Bank of Nigeria (CBN), the Nigerian National Petroleum Corporation Limited (NNPCL), commercial banks, and the 774 local government councils.
ALGON’s Secretary-General, Mohammed Abubakar, confirmed the suit, saying it was to ensure that local governments received direct disbursements from the federation as directed by the Supreme Court.
On July 11, 2024, the Supreme Court ordered that local government allocations must be paid directly to them.
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Justice Minister Fagbemi had instituted the lawsuit on behalf of the federal government, seeking to grant full autonomy, and direct funding to all 774 local government councils in the country.
In a judgment read by Justice Emmanuel Agim, the apex court ruled that states’ retention of local government funds is unconstitutional.
“The demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay local government allocations directly to the local governments or through the states.
“In this case, since payment through states has not worked, the justice of this matter demands that local government allocations from the federation account should henceforth, be paid directly to the local governments,” the court ruled.
However, local government autonomy is yet to be implemented, nearly eight months after the Supreme Court’s judgment.
According to reports, the CBN had asked the 774 local councils to provide at least two years of audited financial reports, before they can receive their allocations directly.
The apex bank insisted that the local governments, must meet this requirement before opening accounts for the direct remittance of their allocations.
Following the delay in the implementation, Abubakar said there was a need to approach the court to seek an order for the representation of local government councils in the FAAC, or any other body that deals with the allocation of these funds.
In the suit, the association urged the court for a declaration that any attempt to disburse funds to the 774 local governments, through commercial banks or other agencies, without the authorisation, and approval of the local councils as illegal.
The association is also seeking a declaration that the first to eigth defendants, cannot disburse monies to the 774 local government councils in Nigeria, through the ninth to 23rd defendants or any other person whatsoever, without the plaintiff authorizing.
ALGON asked for a declaration that the ninth to 23rd defendants or any other person whatsoever after conducting due diligence on the 774 local governments, to avert any diversion of the funds of the local government councils.
Similarly, the plaintiff sought a declaration that the first to seventh defendants or any other person whatsoever, cannot discuss, approve, disburse or in any other way whatsoever, deal with the monies accruing to the 774 local government councils in Nigeria, without the representation of the local government councils at such deliberations, discussions, committees, including at the FAAC, chaired by the second defendant.”
In addition, ALGON also requested an order restraining the defendants from continuing to disburse funds to the local governments, through any other agency or without the direct involvement of the local government councils in the process.
