The Supreme Court judgment ordering direct allocation of funds to local governments runs contrary to the provisions of Section 162(6) of the 1999 Constitution on State Joint Local Government Account. On the flip side, the intendment of the ruling aligns with the political necessity of balancing the scale between overbearing state governors and dependant local councils. But yet unattended is the need for constitutional amendment to resolve the logjam, AMEH OCHOJILA reports.
The recent Supreme Court judgment granting financial autonomy to Nigeria’s 774 local councils through its interpretation of Section 162(5) and (6) of the 1999 Constitution, has sparked significant debates on the country’s federalism, limit of judicial authority, and that of the constitution.
The constitution expressly provides that local council allocations from the Federation Account should be paid through the states into a special account known as ‘State Joint Local Government Account’. However, the Supreme Court in its judgment held that state governments serve as mere intermediaries in the disbursement of these funds, holding no legal right, or claim to them. This interpretation has dramatically altered the methodology of sharing of funds between federal, state, and local councils.
While the constitution seems to promote shared financial responsibility between states and local councils, the judgment effectively removes states’ control over local councils’ allocations. It expressly advocates direct payments to local governments, emphasising that the current system has been plagued by corruption and inefficiency at the state level.
Without a doubt, one of the questions thrown up by the judgment is whether the Supreme Court can effectively “change” the provision of the constitution through its judgment.
Theoretically, the Supreme Court does not have the authority to amend the constitution as the three arms of government are assigned distinctive functions in the spirit of separation of powers. Only the lawmakers are mandated to do so.
That said, it is important to point out that the judiciary is saddled with the responsibility of interpreting the constitution and other municipal laws of the land. It follows, therefore, that if the Constitution is to be amended, it must follow the process outlined in the Constitution itself, which requires approval by the National Assembly, and ratification by state legislatures.
No doubt, the Supreme Court holds the authority under Section 232 of the Constitution to adjudicate disputes between the Federation and the states, but the core debate now revolves around whether the decision conflicts with the explicit constitutional provision.
So, can that judgment be carried out without amending the Constitution to accommodate it? If it is carried out, will it not offend the express provisions of the highest law in Nigeria and in turn, kick-start another round of dispute for those who may wish to challenge such practice?
Before the judgment, there have been debates over the power dynamics between local government councils and state governors. Section 7 of the 1999 constitution, which created the local councils also placed them under the control of state governments, particularly regarding their establishment, finance, and functions. This legal framework allowed governments to exercise domineering influence over local governments, leading to resource mismanagement and manipulation.
The Fourth Schedule of the Constitution merely outlines the specific functions of local governments, such as participation in education, healthcare, and agriculture. However, the state’s role in assigning other functions means that local councils remain highly dependent on state authorities, limiting their autonomy and capacity for independent resource management.
To properly interpret the constitution and strengthen the country’s federalism, in a suit brought by Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN) against the 36 states and the Federal Capital Territory, Justice Emmanuel Agim, in a lead judgment asserted that the constitution could not have intended states to retain funds meant for local governments and use them for their benefit.
He explained that doing so would violate Section 162(3), which ensures that funds from the Federation Account are distributed equally to all three tiers of government.
Justice Agim further noted that the wording in Section 162(5) and (6) which stipulate that funds “shall be allocated to the states for the benefit of their local government councils” was not intended to give states discretion over the use of these funds. Instead, he said, it prescribes the procedure for distributing the money directly to the local councils, who are the rightful beneficiaries.
While delivering the judgment, the court, which gave a historical context of the current system, noted that before the 1999 Constitution, local council officials travelled to the Office of the Accountant General of the Federation to receive their monthly allocations. The introduction of the “State Joint Local Government Account” was meant to streamline this process, and reduce logistical costs, not to provide states with control over local government finances.
Interestingly, legal experts say that the basic principle of law and jurisprudence dictates that when the Supreme Court delivers a judgment that impacts the interpretation of existing laws, the National Assembly is compelled to review and update those laws.
This, they said, ensures that the laws reflect the court’s interpretation and uphold the rule of law. The implication is that any Supreme Court judgment affecting statutory or constitutional provisions should prompt legislative action to bring the law in alignment with the court’s ruling.
They pointed out that based on the Supreme Court judgment, which affected a constitutional provision, it is incumbent on the National Assembly to amend the affected section of the constitution to incorporate the new interpretation provided by the apex court. Such amendments, they said, are necessary to avoid discrepancies between the law as written and the law as interpreted by the judiciary.
The reason is that without this amendment, the uncertainty or ambiguity in it serves as the basis for potential litigation, which could hinder the clear application of the law.Bayo Akinlade, a lawyer and the Convener of Fight Against Corruption in the Judiciary, agrees.
According to him, the basic principle of law and jurisprudence is that once the Supreme Court delivers a judgment that may affect the interpretations of existing law, the National Assembly is bound to review that law and make the necessary changes to reflect the interpretation or the decision of the Supreme Court.
The former national publicity secretary of the Nigerian Law Society, and former chairman of NBA Ikorodu Branch, urged the National Assembly to amend the constitution to reflect the interpretation given by the highest court of the land.
For some, certain provisions of the law are now in a state of flux following the Supreme Court’s ruling. A senior lawyer, Douglas Terkura Pepe, argued that the provision is now optional, or in limbo in light of the Supreme Court judgment. He explained that they can be activated whenever it is convenient or necessary to do so, adding that the apex court judgment has given the Federal Government two options either paying local councils’ allocations directly from the Federation Account to them or paying through the State Joint Accounts. He suggested that these provisions, while still part of the legal framework, would be treated as optional or dormant unless activated by the appropriate government authority.
“In the case of local government allocations, the Supreme Court’s judgment offers two options: the Federal Government can either disburse funds directly to local governments from the Federation Account or do so through the State Joint Accounts. This duality in approach grants the government flexibility, but also places a greater burden on ensuring that either method conforms to constitutional requirements,” he said.
Notwithstanding, some lawyers argue that the Supreme Court’s decision has significantly clarified the legal interpretation of Section 162(6) of the 1999 Constitution, stressing that the judgment not only addresses the immediate issue of local council fund allocation but also serves as a broader guide on how constitutional provisions are to be understood and applied in future.
Mohammed Ndarani (SAN) said the decision has explained the law as contained in the constitution. He said: “In light of the Supreme Court’s decision mandating direct payment of local government funds from the Federation Account, the legal position is that this judgment will now serve as a precedent, clarifying the application of Section 162(6) of the 1999 Constitution. This ruling defines the implications and legal standing of Section 162(6) moving forward.”
However, following the preponderance of views, a constitutional amendment is required to clarify and reaffirm the original intent in line with evolving interpretation, to remedy the imbroglio.
