The Central Bank of Nigeria (CBN) has initiated the profiling of chairmen and signatories to the bank accounts of the 774 local government areas (LGAs) across the country. This comes as part of the implementation process following the Supreme Court judgment in July 2024, which affirmed the financial autonomy of LGAs and mandated the direct payment of allocations from the Federation Account to their accounts. In response, the Association of Local Governments of Nigeria (ALGON) has disputed the CBN’s claims, stating that it has not received any official communication regarding the account-opening process, raising concerns about delays in the full implementation of the system.
Meanwhile, the Supreme Court’s ruling was hailed as a historic step towards empowering local governments, which have long been under the control of state governors. The judgment prohibited governors from further controlling funds meant for the councils and directed the Accountant-General of the Federation to ensure direct payments to LGA accounts. Despite this, eight months after the ruling, the financial autonomy of the local government remains unimplemented, with the bank citing procedural delays and the need for proper documentation as the primary reasons.
Kofo Salam-Alada stressed the importance of the Know Your Customer policy.
Furthermore, the Director of Legal Services at the CBN, Kofo Salam-Alada, explained that profiling LGA chairmen and signatories is a standard procedure under the Know Your Customer (KYC) policy and is essential for ensuring financial accountability. He emphasised that the process is ongoing and that the central bank is collaborating with the Office of the Accountant-General of the Federation (AGF) to ensure compliance. Salam-Alada also revealed that the bank has written to the LGAs, urging their chairmen to come forward for documentation.
He assured that the accounts would be operational within 48 hours once the necessary documentation was completed. However, ALGON’s representative, Sam Akala, countered the claims, stating that the association has not received official communication from the apex bank regarding the account opening process. Akala expressed their readiness to embrace the new role in grassroots development but stressed the need for clear and official communication from the financial institutions to facilitate the process. This disagreement notes the communication gap between them, which could further delay the implementation of financial autonomy.
Federal government commitment to local government independence.
In addition, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, represented by the Director of Civil Litigation, Tijjani Gazali, reiterated the Federal Government’s commitment to ensuring full local government autonomy. He disclosed that the council independence implementation committee, comprising representatives from the Federal Government, ALGON, and the Nigerian Governors’ Forum, is working on a framework for directly paying allocations to LGAs. Fagbemi expressed optimism that the committee would soon complete its mandate and present its recommendations to citizens.
Fagbemi also condemned the continued illegal removal of democratically elected local government councils by some state governors, describing it as a flagrant disregard for the rule of law. He warned that such actions undermine the Supreme Court’s judgment and could have severe consequences for the states involved. He further emphasised the historical significance of local governments in the country, noting their potential to drive Sustainable Development and improve grassroots governance. Meanwhile, the Economic and Financial Crimes Commission (EFCC) also called for greater accountability and prudent management of resources at the local government level.
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Ola Olukoyede, the EFCC Chairman, warned that local government chairmen do not enjoy immunity from investigation and prosecution for fraud. He stated that the commission would not wait until the end of their tenure to probe any mismanagement of funds. Olukoyede decried the stagnation and Poverty in rural areas despite the enormous resources allocated to the council over the years, urging chairmen to establish compliance units to monitor the use of resources and project delivery. Olukoyede also revealed that the EFCC has established a Fraud Risk Assessment and Control Department, which will periodically monitor the use of funds by local governments. He further emphasised that the commission would conduct surprise visits to ensure transparency and accountability.