What just happened — the new ruling
The Supreme Court of Nigeria (SC) has sharply rebuked the Federal Government of Nigeria (FG) for failing to implement its July 2024 decision that statutory allocations to local government councils (LGs) must be paid directly to them — not funnelled via state governments.
In a recent judgement delivered by Justice Mohammed Idris, the court said there was no credible evidence that the AGF had taken steps to operationalise the direct-payment mechanism. The court therefore ordered immediate compliance.
The case in question was brought by the state government of Osun State; however the SC struck out that suit — not because it disagreed with the right of LGs to funds, but because it held that only the LGs themselves (not the state government) have the legal standing (“locus standi”) to sue for their withheld allocation.
Why this matters — LG autonomy and constitutional rights
The July 2024 SC ruling already declared that the old practice of routing LG funds through state governments was unconstitutional.
The court reaffirmed that Local Government Councils are distinct, autonomous constitutional entities — not appendages of states. This means they have the exclusive right to receive and manage their allocations directly.
By demanding compliance, the SC is enforcing the constitutional separation of powers between the federal, state, and local tiers — a move many see as strengthening grassroots democracy and accountability.
What the ruling directs the FG to do
Immediately release all outstanding funds due to all LGs across Nigeria, from the Federation Account — without further delay or withholding.
Establish and operationalise the required administrative modalities (e.g. dedicated accounts for LGs) to ensure consistent direct disbursement going forward.
Recognise that any future release of LG allocations must bypass state governments entirely, and go directly to the LG councils themselves.
What this means for local governments & citizens
LGs now have the legal backing to claim full financial autonomy — enabling them to receive funds directly and manage local development projects, salaries, and services more transparently.
This could curb abuses or diversion of LG funds at state level, improving the likelihood that allocations truly reach grassroots communities.
For citizens, it may translate into better delivery of basic services (roads, waste management, primary healthcare, education) because LGs — rather than states — will control their own revenue.
However, success depends on rapid and sincere implementation by federal authorities, and on LGs themselves demonstrating capacity and accountability to manage funds properly.
Challenges & what remains unclear
The SC struck out the Osun-led suit — meaning LGs themselves must step forward (with standing) to demand their allocations.
Implementation has been slow so far: several reports suggest many LGs are still not receiving direct payments, largely due to bureaucratic delays, lack of dedicated bank accounts, or state resistance.
Even with funds, actual improvement depends on governance at local level — e.g. transparent budgeting, accountability, and capacity for service delivery. As some analysts argue, legal and financial autonomy is just part of the solution.
Final thoughts
The Supreme Court’s fresh order demanding compliance from the FG is a landmark moment for local government autonomy in Nigeria. If implemented properly, it could reshape how grassroots governance and public service delivery works — shifting control and resources from state capitals back to the communities where they belong.
Whether this ruling will lead to real-world change depends on political will, fiscal discipline, and the readiness of councils to manage funds transparently. But as of now, the ball is in the government’s court — and ordinary Nigerians have reason to watch closely.
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