FAAC allocations: Why Nigerian governors and FG should open accounts for 774 local government areas – Ozekhome

Senior Advocate of Nigeria, Mike Ozekhome, has advised governors, the federal government, and local government council chairmen to open bank accounts for Nigeria’s 774 local government areas.

Senior Advocate of Nigeria, Mike Ozekhome, has advised governors, the federal government, and local government council chairmen to open bank accounts for Nigeria’s 774 local government areas.

He expressed his views in a statement shared with Nairametrics on Thursday, explaining that opening accounts would comply with the Supreme Court’s judgment, which ordered the funds due to the LGAs to be paid directly to them from the Federation Account.

Nairametrics reports that the apex court judgment signaled a major departure from what was obtained over the years, where there was a joint account between the LGA and state governments but controlled by the latter.

How to implement the apex court judgment on FAAC allocations to LGAs
Nairametrics previously reported that the Supreme Court had delivered its verdict following the federal government’s suit, which aimed to prevent the governors of 36 states from spending or tampering with the 20.6% allocation from the federation account to local government areas, among other reliefs targeting local government autonomy.

The apex court ruled that the allocations to joint state and local government accounts were merely procedural practices adopted in the past. It emphasized that it was not the intention of the 1999 Constitution for governors to retain funds due to the LGAs.

The apex court declared that the amount allocated to and credited to Local Government Councils in the Federation Account could be paid directly by the Federation to democratically elected Local Government Councils, among other rulings.

Reacting to the development, Ozekhome stated that compliance with the said judgment is not impossible.

He added that the refusal by state governors to remit to the LGCs was the ugly mischief the apex court judgment sought to cure.

He explained that the content, terms, and directives contained in the judgment are very straightforward and unambiguous.

He said that since the judgment mandates the direct payment of FAAC allocations to the LGCs, the FG, states, and LGCs must obey and enforce it by opening bank accounts for the LGCs for the onward disbursement of their monthly dues.

He said:

“The answer is equally simple. The FG, states, and LGCs should now meet (and I am told they have been meeting) at FAAC and decide on modalities and procedures for opening accounts for LGCs so that their allocation under section 162 of the 1999 Constitution is paid directly to them and not to the joint state LG account that is oftentimes waylaid by state governors and fleeced without the helpless LGCs being able to raise a finger.

“The apex court had declared emphatically that, ‘by virtue of section 162(3) and (5) of the Constitution of Nigeria, 1999, the amount standing to the credit of LGCs in the Federation Account shall be distributed to them and be paid directly to them’; that a state, either by itself or governor or other agencies, has no power to keep, control, manage, or disburse in any manner, allocations from the Federation Account to LGCs.”

He stated that compliance with the judgment is in the interest of justice and would bring true fiscal federalism to Nigeria.

What you should know
Following the Supreme Court verdict, the Federation Accounts Allocation Committee (FAAC) distributed N1.354 trillion in June revenue among the Federal Government, states, and Local Government Councils (LGCs).

This distribution occurred during the July 25, 2024, FAAC meeting in Abuja, chaired by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

Edun informed the press that the Supreme Court judgment could not be implemented at that time because the actual proceedings had not yet been handed down to the Attorney-General of the Federation, Lateef Fagbemi, for review and implementation.

“They were not in the hands of the Attorney-General for him to start implementing,” he said, assuring that the Supreme Court judgment on local governments will be faithfully implemented.

In a recent forum, Lateef Fagbemi (SAN) vowed to ensure the prosecution of any serving local government chairpersons or councillors tampering with the Federation Accounts Allocation Committee (FAAC) allocations to the LGs.

https://nairametrics.com/2024/08/09/faac-allocations-why-nigerian-governors-and-fg-should-open-accounts-for-774-local-government-areas-ozekhome/