Supreme Court Grants LGs Financial Autonomy, Declares Caretaker Committees Illegal

The Supreme Court of Nigeria has held that the retaining or utilizing funds that are meant for the 774 Local Government Areas, LGAs, in the country by state governors are illegal and constitutional.

The apex court in a landmark ruling on Thursday barred the governors from continuing to receive and seize funds allocated to LGAs in their states. 

It described it as “dubious practice” which has gone on for over two decades, saying it was a clear violation of Section 162 of the 1999 Constitution, as amended.

In its lead judgement delivered by Justice Emmanuel Agim, the court further held that no House of Assembly of any state has the power to make laws that could, in any manner, interfere with monies meant for the LGAs.

It stressed that the law mandated that LGAs must be governed by democratically elected officials, the Supreme Court ordered that forthwith, funds meant for the LGAs must be directly paid to them from the federation account.

“Demands of justice require a progressive interpretation of the law. It is the position of this court that the federation can pay LGA allocations to the LGAs directly or pay them through the states.

“In this case, since paying them through states has not worked, justice of this case demands that LGA allocations from the federation account should henceforth be paid directly to the LGAs,” the apex court held. 

The apex court also declared unconstitutional the appointment of caretaker committees by governors to run the affairs of the LGAs.

Justice Agim, who dismissed the objections filed by state governors, said the 36 states are under obligation to ensure democratic governance at the third tier of government.

The Attorney General of the Federation, Lateef Fagbemi (SAN), had filed a lawsuit on behalf of the Federal Government, seeking to grant full autonomy and direct funding to all 774 local government councils in the country.

The 36 state governments, through their attorneys general, filed a counterclaim, arguing that the Supreme Court lacked the jurisdiction to hear the case.

But Justice Agim held that the AGF has the legal authority to initiate the lawsuit and uphold the constitution.