Two years after the Supreme Court ordered the direct payment of local government allocations, state control of council finances and elections persists, raising fresh questions about the sanctity of the law, especially the constitutional framework governing the third tier of government, KEHINDE OLATUNJI reports.

Two years after the Supreme Court ordered the Federal Government to pay allocations due to Nigeria’s 774 local government councils directly into their accounts, the battle over who controls the finances and administration of the councils remains unresolved.

The judgment, delivered on July 11, 2024, declared unconstitutional the practice of state governments retaining and using funds meant for local governments and ordered that allocations from the Federation Account be paid directly to democratically elected councils.

The apex court also held that state governments could not replace elected councils with caretaker committees.

Yet, two years after the landmark ruling, implementation remains uneven across the country, with states accused of retaining mechanisms that allow them to exercise considerable influence over local government finances and administration.

The problem is rooted partly in the constitutional framework itself. Sections 7 and 162 of the 1999 Constitution, particularly the provision establishing the State Joint Local Government Account, have for years provided the structure through which state governments participate in the management and distribution of funds meant for councils.

Although the Supreme Court has clarified the constitutional position on the direct payment of local government allocations, the National Assembly has yet to enact the broader constitutional amendments many stakeholders believe are necessary to remove the structural ambiguities surrounding the relationship between states and councils.
State governors hold on to ‘power’

Local governments received about N10.48 trillion through FAAC allocations between the July 2024 and June 2026 FAAC meetings, according to an analysis of FAAC reports based on data from the National Bureau of Statistics and the Office of the Accountant-General of the Federation.

Despite the increase in allocations, however, there is still limited evidence in many communities of a corresponding improvement in basic services traditionally associated with local governments.

While some states have taken steps to align their laws and administrative practices with the judgment, others have retained or introduced arrangements that critics said continue to give governors substantial influence over council finances.

In Lagos State, for instance, the government has maintained that it is implementing the Supreme Court judgment. However, the structure of local administration remains complicated by the existence of 20 constitutionally recognised local government areas and 37 Local Council Development Areas (LCDAs), which are not recognised as separate local governments under the 1999 Constitution.

Consequently, the Joint Account Allocation Committee (JAAC) remains central to the distribution of funds among the 20 recognised local governments and the LCDAs.

Critics argue that the arrangement gives the state government considerable influence over the distribution and administration of funds meant for the councils.

The situation is further complicated by the conduct of local government elections. In Lagos, the July 12, 2025, council election produced an overwhelming victory for the ruling All Progressives Congress (APC), which won all 57 chairmanship positions and 375 of the 376 councillorship seats. The Peoples Democratic Party (PDP) secured one councillorship seat in Yaba.

A council chairman, who spoke on condition of anonymity, questioned the extent of the autonomy being claimed when the State House of Assembly could still summon or suspend an elected council chairman. “Where then is the autonomy?” he asked.

According to him, the fundamental issue must ultimately be addressed through constitutional reform.

“The best approach is for the National Assembly to begin by amending Sections 7 and 162 of the 1999 Constitution before true autonomy for local governments can be realised,” he said.

In Anambra State, the House of Assembly enacted the Local Government Administration Law 2024, which provides for the allocation of funds to local governments to be paid into a State Joint Local Government Account.

Governor Chukwuma Soludo has defended the legislation as a mechanism to promote consistency, accountability, and transparency in the administration of local councils.

Critics, however, contend that maintaining a state-controlled account runs contrary to the spirit of the Supreme Court judgment, which directed that funds due to democratically elected councils should be paid directly to them.

Nasarawa State took a different approach, amending its local government laws to abolish the joint account arrangement in an attempt to align its legal framework with the apex court’s decision.

In Imo State, however, Federation Account allocations have continued to be processed through the state government, with funds subsequently released to the 27 local government councils for salaries and other operational expenses.

In neighbouring Enugu State, allocations have also continued to pass through the Joint Allocation Accounts Committee. The state’s 17 local government chairmen have reportedly executed a power of attorney authorising the Enugu State Board of Internal Revenue to collect and administer tax and non-tax revenues on behalf of the councils.

Osun State presents another dimension of the problem. The prolonged political and legal dispute over control of the local governments has complicated the implementation of the Supreme Court judgment and left the question of full financial autonomy unresolved.

Taken together, the examples demonstrate the absence of a uniform national approach to implementing the judgment.

While some states have changed their laws or administrative practices, others have retained structures that allow significant state involvement in council finances.

A winner-takes-all syndrome
Since the Supreme Court ruling, local government elections have exposed another major obstacle to genuine council autonomy: the dominance of incumbent political parties at the grassroots.

At least 15 states have held local government elections since July 2024, with ruling parties recording sweeping victories in most polls.

In several states, incumbent parties won virtually all or all of the contested chairmanship and councillorship positions.

In Lagos, the APC won all 57 chairmanship positions and 375 of the 376 councillorship seats in the July 2025 election.

A similar pattern was recorded in Kaduna, where the APC won all 23 chairmanship positions and 255 councillorship seats in the October 2024 election.

In Kwara, the APC reportedly swept the chairmanship and councillorship positions across the state’s 16 local government areas.

The pattern was also recorded in Sokoto, where the APC won all 23 chairmanship positions and all the councillorship seats.

In Imo, the party reportedly won all 27 chairmanship positions and 305 councillorship seats.

In Enugu, the ruling party won all 17 chairmanship positions, while the ruling parties in Oyo and Bayelsa also secured all 33 and eight chairmanship positions, respectively.

In Gombe, the APC won all 11 chairmanship positions and 114 councillorship seats, while in Borno, it swept all 27 chairmanship positions and 312 councillorship seats.

Other states where the 2024 local government elections were widely reported to have produced similar winner-takes-all outcomes included Delta, Ebonyi, Jigawa, Kogi, Nasarawa, Yobe and Ogun.

The pattern has raised questions about whether local governments are genuinely controlled by representatives chosen through competitive elections or are increasingly becoming extensions of ruling parties at the state level.

For local government autonomy to have practical meaning, political independence at the grassroots is considered as important as financial independence.

The implementation bottleneck
Another challenge has been the administrative process required to operationalise direct payment of local government allocations.

Following the Supreme Court judgment, the Central Bank of Nigeria commenced the profiling of the 774 local government chairmen and account signatories as part of preparations for the direct payment of allocations into council accounts.

The Federal Government also maintained that only democratically elected local government administrations would qualify to receive allocations directly from the Federation Account. However, implementation has been slow.

Some local governments reportedly delayed submitting account details and other documentation required for dedicated accounts, while banking requirements and other administrative procedures also contributed to the delays.

Sources familiar with the process said some council chairmen were reluctant to process council accounts without first consulting relevant authorities at the state level.

The result is that, although virtually all states have now conducted local government elections, the direct payment system envisaged by the Supreme Court has yet to become fully operational nationwide.

This has left many local governments operating within financial arrangements that still involve state governments. The implication is significant.

The Supreme Court’s judgment was intended to give councils greater control over their resources, enabling them to plan and execute projects independently according to their communities’ needs.

But where funds remain subject to state-level processes, councils’ ability to exercise meaningful financial independence is inevitably constrained.

For residents, the debate over constitutional provisions, JAAC and direct allocations ultimately comes down to a simple question: what has changed in their communities?

Across many local government areas, residents continue to complain about poor primary healthcare centres, dilapidated rural roads, inadequate drainage systems, weak waste management, neglected markets and deteriorating primary schools.

Ironically, many of these responsibilities fall within the constitutional functions of local governments.

Speaking with The Guardian, Saliu Babatope, a resident of Ibarapa Local Government in Oyo State, lamented that increased allocations had not translated into visible improvements in public services in his community.

The disconnect between increased revenue and service delivery has therefore become one of the strongest arguments in the debate over local government autonomy.

The accountability question
Financial autonomy, however, cannot by itself guarantee better governance.

Unlike many federal and state institutions, most local governments do not routinely publish detailed budgets, procurement records or audited accounts in a manner that allows citizens to track expenditure.

Consequently, citizens may know how much money is allocated to their councils but have limited information about how those funds are spent.

The absence of reliable expenditure data has made it difficult to establish a direct relationship between increased allocations and improved service delivery. This is where the question of political autonomy becomes critical.

A local government chairman who depends politically on a governor may find it difficult to exercise financial independence, even where funds are formally available to the council.

A scholar at Osun State University, Omotola Ayinla, said genuine local government accountability could not be achieved without credible elections.

“For the third tier of government to be accountable, there must be a free and fair electoral process. The process of electing council officials will continue to be skewed as governors still hold the aces,” she said.

According to her, council officials who emerge from politically controlled elections may become beholden to the governors who helped them secure office.

“After their elections, many of them are either only too grateful to do the bidding of the governors or are too scared to assert their independence,” she added.

The controversy over local government finances did not begin with the Supreme Court judgment.

One of the most prominent recent cases occurred in Ogun State in 2023, when the then Chairman of Ijebu East Local Government, Wale Adedayo, alleged that councils in the state had received virtually no direct federal allocations for years.

He accused the state government of diverting council funds. The allegations attracted national attention before he was suspended by councillors over allegations of financial misconduct.

Whether those allegations were ultimately established or not, the controversy underscored a problem that has persisted for decades: local governments have often had limited control over resources constitutionally allocated to them.

The Supreme Court judgment was an attempt to address that concern precisely. Two years later, however, implementation has revealed a difficult reality.

The legal position has changed, but the political and administrative structures that have historically given states considerable influence over local governments have proved more difficult to dismantle.

The Supreme Court may have settled the legal question of whether state governments can retain funds intended for democratically elected local governments, but the practical question of how that autonomy will be exercised remains unresolved. Two years after the judgment, compliance differs significantly from one state to another.

Some states have amended their laws and taken steps towards direct council control of funds. Others have retained arrangements that critics say preserve substantial state oversight.

At the same time, the dominance of ruling parties in local government elections raises another fundamental question: can financial autonomy be meaningful when the political structures through which council officials emerge remain heavily influenced by state governments?

Until both questions are addressed, the control of council finances and the independence of council elections, local government autonomy may remain more a constitutional promise than a practical reality.