Investigation: Governors Working Against Direct Allocations to LG Councils

By Our Reporters

THE BEAGLES NEWS can authoritatively confirm that the Nigerian Governors Forum has been discreetly opposing the implementation of the Supreme Court’s judgment on financial autonomy and direct allocations to the 774 local government areas (LGAs) across the country.

These covert efforts by the governors have created significant obstacles for the 36 states’ council chairmen, preventing them from submitting their account details to the Central Bank of Nigeria (CBN) for direct allocations. As a result, the implementation of local government financial autonomy, as ruled by the apex court, has been stalled.

It will be recalled that on July 11, 2024, the Supreme Court ruled in favor of local government autonomy, mandating the direct disbursement of allocations to all 774 LGAs.

Investigations by THE BEAGLES NEWS, particularly in the South-South and South-East geopolitical zones, reveal that governors in these regions are determined to circumvent the Supreme Court ruling. Reports indicate that they have been discreetly pressuring council chairmen not to engage in any financial agreements with the Ministry of Finance, the Office of the Accountant General of the Federation, or the CBN regarding council funds.

Some governors have reportedly gone as far as subtly threatening council chairmen with impeachment if they submit their account details to the CBN or fill out any formal documentation concerning the management of local government funds.

Furthermore, sources indicate that several state governors have signed an Irrevocable Standing Order (ISO) with members of the Association of Local Governments of Nigeria (ALGON), alleging that the councils are indebted to state governments to the tune of billions of naira.

According to a source who spoke to THE BEAGLES NEWS, this ISO effectively keeps the councils under the control of the governors, who continue to dictate council administration.

Investigations further revealed that ALGON officials in Akwa Ibom, Cross River, Rivers, Abia, Ebonyi, Enugu, Imo, Anambra, Bayelsa, and Edo states are struggling with their next course of action. Many are reluctant to challenge their respective governors, who single-handedly facilitated their appointments—often through both fair and foul means.

Some governors are reportedly using subtle threats, including impeachment, suspension, and the denial of certain privileges, to ensure compliance.

A local government chairman from one of the South-South states, who requested anonymity, shared his concerns:

“We are being policed like common criminals. In one of our meetings with the Chief of Staff to the Governor, we were scolded and severely reprimanded for attempting to send our account details to the CBN.”

“We were bluntly reminded that we did not contest elections, and any move to disobey the governor’s directive would be considered an act of mutiny.”

Similarly, another chairman from the South-South confided in THE BEAGLES NEWS:

“As soon as we were sworn in, we were made to sign an MoU allowing the governor to manage our funds. Even when we attend national ALGON meetings in Abuja, we must seek permission from the governor and consult him on what to say during discussions.”

“We were also advised to disregard the Federal Government’s directives because failing to comply with the governor could mean losing out on a second term when elections come around. That is why we are resisting the CBN’s directives on account submissions.”

A chairman from the South-East, who also spoke off the record, lamented:

“This local government autonomy would have been the best thing for grassroots governance, but the governors maintain a firm grip on the council chairmen.”

“In fact, we signed an Irrevocable Standing Order (ISO) even before assuming office to prevent any form of betrayal after our swearing-in. We were explicitly warned against granting media interviews on local government financial autonomy.”

According to another council chairman from a neighboring state, some chairmen who attempted to challenge their governors were quickly silenced.

“One of our colleagues tried to assert his authority, but the governor almost suspended him immediately.”

However, THE BEAGLES NEWS found that Delta State appears to be an exception. Unlike other states, Delta’s governor is reportedly in favor of local government financial autonomy. As a result, all local government chairmen in the state have successfully submitted their account details to the CBN for direct statutory allocations.

The relative peace and cooperation between Delta’s local government chairmen and the state governor have been attributed to this progressive stance.

A source close to the Federation Account Allocation Committee (FAAC) Technical Sub-Committee meeting confirmed that Delta State’s LGAs submitted their account details to the Office of the Accountant-General of the Federation (OAGF).

According to the source, this submission was confirmed during the FAAC Technical Sub-Committee meeting held on January 17, 2025, at the Federal Ministry of Finance headquarters in Abuja. The document showed that while the OAGF had begun receiving account details from various sources, only Delta LGAs had fully complied. Some LGAs submitted their details directly, while others did so through their state governments.

The Accountant-General of the Federation, Oluwatoyin Madein, and the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, SAN, have begun working on the implementation of direct allocations to LGAs.

The two senior officials have been holding consultations on the modalities for local governments to submit their bank accounts for direct payments. However, a major challenge they face is identifying LGAs with democratically elected officials.

According to the Accountant-General:

“The office has started receiving account details from various sources—some directly, while others are routed through the states. So far, only local governments in Delta State have fully complied. We are still consulting with the Attorney-General of the Federation to finalize the submission process.”

The meeting, chaired by the Accountant-General, highlighted legal and procedural challenges, particularly in identifying LGAs with properly elected leadership. She acknowledged that these complexities must be resolved before the system can function effectively.

The Central Bank of Nigeria (CBN) has also begun profiling local government chairmen and signatories to their bank accounts as part of efforts to implement financial autonomy.

CBN’s Director of Legal Services, Kofo Salam-Alada, explained that this is necessary to ensure financial accountability. He emphasized that the apex bank has no direct banking relationship with the LGAs but is conducting due diligence through Know Your Customer (KYC) procedures.

“We are working closely with the Attorney-General’s office and have already written to the LGAs,” Salam-Alada stated.

He urged ALGON members to cooperate with the CBN at the local level, assuring that once proper documentation is completed, accounts will be operational within 48 hours.

“We encourage all 774 local government chairmen to complete their documentation. No account can be operational without the required Customer Due Diligence (CDD) procedures,” he added.

Despite the CBN’s claims of ongoing profiling, ALGON representatives across various states have denied receiving any formal communication regarding the opening of bank accounts.