In a historic ruling, Nigeria’s Supreme Court has granted financial autonomy to local governments, a decision that promises to transform governance and transparency across the nation. This landmark judgment reaffirms the significance of local government administration, traditionally the third tier of government operating below the federal and state levels, and heralds a new era of decentralisation and empowerment for local authorities.
For decades, local governments in Nigeria have struggled under the heavy yoke of financial dependence on federal and state allocations. This dependency has often stymied their ability to deliver essential services, foster development, and respond promptly to the needs of their communities. The Supreme Court’s decision to grant direct access to funds from the Federation Account is not just a legal victory but a moral one, ensuring that local governments can finally stand financially.
Local government as the third tier of government in Nigeria is the closest to the people as it deals with the people from the grassroots level.
It is crucial to emphasize that its significance holds great weight in the socio-economic and political fabric of a nation like Nigeria, where the majority of the population resides in rural communities.
There are responsibilities constitutionally and almost exclusively assigned to local governments, yet they have struggled to deliver effectively. For instance, it is the responsibility of a local government to maintain streets, street lighting, drains and other public highways, parks and gardens, and open spaces. A local government is also responsible for the provision and maintenance of public conveniences, sewage and refuse disposal; registration of all births, deaths, and marriages.
Local governments are also empowered by the constitution to provide and maintain primary, adult, and vocational education, as well as the provision and maintenance of health services.
The State and Local Government Joint Account (SLGJA) was introduced in the 1999 Constitution of the Federal Republic of Nigeria with the basic aim of pooling all the financial allocations due to the various local government councils from the Federation Account, for onward distribution by the states to the local councils. This is to ensure that the state governments effectively control and monitor expenditures by the executives of the local government councils and that the funds are properly utilized for purposes of effective grassroots service delivery. However, state governments have exploited this system, depriving local governments of the necessary funds for project implementation and rural development.
Many research papers and public affairs commentaries have explored the impact of the joint-account fiscal relationship on the administrative autonomy of the of local government councils and the fiscal capacity to deliver public services to the rural communities in their areas. In most cases, findings show that this relationship negatively affects the fiscal capacity of local councils to deliver effective public services to the various communities that make up their areas. There are cases of illegal deductions, withholding of council funds, and refusal to remit statutory 10 per cent of total revenue of states to local councils. Many went as far as to recommend a constitutional review to strengthen the local government system to effectively function as the third tier of government in line with the Guidelines for 1976 Local Government Reforms.
Governance at the local level is poised for an overhaul. With financial autonomy, local governments are no longer at the mercy of state governments to approve and disburse funds. This newfound independence means that local councils can now plan, budget, and execute projects without undue delays. From building schools and health centers to maintaining local roads and markets, the impact of this financial independence will be profound and far-reaching.
Local leaders, now directly accountable to their constituents, will have the authority and resources to address local issues more effectively. This shift is expected to foster a more responsive and accountable governance structure, one that is attuned to the unique needs and aspirations of each community.
One of the most significant implications of this financial autonomy is the enhancement of transparency. Direct access to funds necessitates robust financial management practices, reducing the opportunities for corruption and mismanagement that have plagued local governments in the past. With financial autonomy comes the responsibility to manage public funds prudently, ensuring that every naira is accounted for and spent in the public interest.
Moreover, this autonomy will invite increased scrutiny from both local communities and oversight bodies. Empowered citizens, armed with the knowledge that their local governments have the resources to effect change, will be more vigilant and demand transparency and accountability. This civic engagement is a cornerstone of democratic governance and will help ensure that local officials are held to the highest standards of integrity.
While the Supreme Court’s ruling is a monumental step forward, it is not without its challenges. The capacity of local governments to manage increased funds effectively is a significant concern. Without adequate training and capacity-building measures, there is a risk that the additional resources could be mismanaged. Therefore, local government institutions must be strengthened through continuous education and the implementation of robust financial management systems.
Furthermore, the relationship between state and local governments may become strained as power dynamics shift. It is essential to establish clear guidelines and frameworks to manage this transition smoothly and to mitigate any potential conflicts over resource control.
The financial autonomy granted to local governments by Nigeria’s Supreme Court, engineered by the present administration of President Bola Tinubu, is a bold and transformative move that promises to enhance governance and transparency across the country. By empowering local governments with direct access to their funds, these ruling lays the foundation for more efficient, accountable, and responsive local governance. However, the success of this initiative hinges on the ability of local governments to manage their newfound resources effectively and the establishment of strong oversight mechanisms.
As Nigeria embarks on this new chapter of decentralised governance, all stakeholders – federal, state, and local – must work collaboratively to ensure that this financial autonomy translates into tangible benefits for the citizens. This is not just a victory for local governments; it is a victory for democracy, accountability, and the Nigerian people.
