AUTONOMY: Direct Payment to 774 LGs Suffers Fresh Setback as CBN Sets Tough New Condition

By Dansu Peter  Local governments across Nigeria are facing fresh obstacles in their push to receive direct allocations from the Federation ...

By Dansu Peter 

Local governments across Nigeria are facing fresh obstacles in their push to receive direct allocations from the Federation Account, as the Central Bank of Nigeria (CBN) imposes stringent new requirements.  

The apex bank has mandated each of the 774 local governments to submit a two-year comprehensive financial audit before direct remittances can commence. This condition, which came to light yesterday, has thrown the long-anticipated financial autonomy plan into uncertainty, report by The Nation says 

Originally slated to begin last month, direct revenue disbursement was postponed after many councils failed to provide the necessary financial details. Consequently, their share of N361.754 billion from the total N1.424 trillion distributable revenue was rerouted through state governments.  

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AUTONOMY: CBN to Open Dedicated Accounts for Badagry Local Govt., 773 Other LGs  

To facilitate autonomy, the CBN has begun the process of opening individual accounts for local governments, ensuring they receive funds directly from Abuja. However, with the next Federation Account Allocation Committee (FAAC) meeting scheduled for February, doubts persist over the ability of the LGs to meet the audit submission deadline.  

Badagry Today had reported that the CBN was resolved to open a dedicated account for all the 774 Local Government in Nigeria. A move necessary to begin direct payment to the LGs in Conformity with the Supreme Court ruling granting full financial autonomy to them. 

According The Nation, CBN insiders told it that the bank could not proceed with account openings without verifying the financial health of each local government.  

“We cannot just open fresh accounts for the LGAs when many have never functioned as independent financial entities,” a senior official stated, emphasizing the necessity of the audit.  

Meanwhile, an Inter-Ministerial Committee, led by the Secretary to the Government of the Federation (SGF), is working on a framework to enforce the Supreme Court’s ruling on local government autonomy.  

The development has sparked concerns over whether LGs will be able to meet the CBN’s conditions in time, raising fears that the long-awaited financial independence of local governments may remain a distant goal.