Efforts to implement direct revenue disbursements to Nigeria’s 774 local government areas (LGAs) from the federation account have encountered delays due to administrative setbacks.
The LGAs are collectively entitled to N361.754 billion from the N1.424 trillion allocated to federal, state, and local governments this month. However, the federal government’s plan to deposit funds directly into local government accounts has been stalled as many councils failed to provide the required banking details.
During the January 2025 meeting of the Federation Account Allocation Committee (FAAC) in Abuja, it emerged that numerous LGAs had yet to open accounts with the Central Bank of Nigeria (CBN). Those that had taken the step reportedly failed to submit the necessary account details for crediting.
“The foundational structures for this initiative are not yet in place,” a source close to the matter revealed. “Some councils opened CBN accounts but didn’t forward their details to FAAC. Without this information, payments cannot proceed. Once they provide the required details, they will receive their allocations.”
Challenges and Political Interference
Other factors, such as delays in local government elections and political interference at the state level, have also contributed to the issue. Some LGAs are reportedly constrained by maneuvering from state governments and the ongoing electoral process to install officials legally authorized to manage funds.
“State-level politics and the timing of local government elections have left many councils unable to comply with the requirements,” the source added.
FAAC officials expressed optimism that the LGAs would resolve these administrative hurdles by the end of January, paving the way for their allocations.
Financial Autonomy for Local Governments
The plan for direct payments stems from a landmark Supreme Court ruling in July 2024 that granted financial autonomy to LGAs. Following the ruling, the federal government directed all councils to establish CBN accounts to facilitate monthly disbursements directly from the federation account.
The delay highlights the need for stronger administrative frameworks and cooperation between local councils and other tiers of government to ensure the smooth implementation of financial autonomy reforms.
