FG opens up on delay in CBN’s direct funding to LG

The Federal Government has clarified why the Central Bank of Nigeria (CBN) has yet to begin direct disbursement of funds to the 774 Local Government Areas (LGAs), despite a Supreme Court ruling mandating local government autonomy.

Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, alongside CBN’s Director of Legal Services, Kofo Salam-Alade, explained that the delay is due to the absence of a proper framework to facilitate direct funding. They assured that efforts are ongoing to finalize the necessary procedures and profile designated signatories for the accounts.

Speaking at a forum organized by the Nigerian Bar Association (NBA) on local government autonomy, Fagbemi stated that following the Supreme Court’s ruling on July 11, 2024, a committee was established to ensure smooth implementation of direct allocations. The committee includes representatives from the Federal Government, the Association of Local Governments of Nigeria (ALGON), and the Nigerian Governors Forum (NGF).

He emphasized that President Bola Tinubu’s administration initiated the legal battle against the 36 state governors to strengthen local government autonomy. However, he expressed concerns that some state governments continue to illegally dissolve elected local councils, warning that such defiance of the Supreme Court ruling could lead to serious consequences.

CBN’s Legal Director, Salam-Alade, further explained that the apex bank does not have direct banking relationships with local governments and is currently verifying those who will manage the designated accounts. He urged local government representatives to complete the required documentation, assuring that once all procedures are in place, the disbursement process will proceed smoothly.

However, ALGON representative Sam Akala claimed he was unaware of any official communication from the CBN regarding the opening of local government accounts. Despite this, he reiterated ALGON’s commitment to ensuring grassroots development.

NBA President, Mazi Afam Osigwe, who also spoke at the event, stressed the need for democratic governance at the local level, warning that failure to properly manage local governments could lead to deeper national challenges.