Nigerian Local Governments Set for Direct Fund Disbursement as CBN Awaits Federal Directive

The Association of Local Governments of Nigeria (ALGON) has announced that all 774 local governments will open dedicated accounts with the Central Bank of Nigeria (CBN) for the direct disbursement of funds from the Federation Account, following a Supreme Court ruling that upholds local government autonomy.

ALGON’s National President, Bello Lawal Yandaki, emphasized the importance of the account openings for the smooth implementation of the ruling, which mandates direct allocation to councils, bypassing state governments. The CBN is reportedly awaiting directives from the Federal Government on when to proceed with the account openings. Once initiated, the process can be completed within 24 to 48 hours.

Yandaki explained that the delay in disbursement was due to councils failing to submit necessary bank account details required by the Federation Accounts and Allocations Committee (FAAC). However, he reassured that there is no cause for alarm, as meetings with relevant stakeholders have made progress toward resolving the issues. He noted that direct federal revenue allocations to local governments are expected to commence this January.

A source at the FAAC indicated that while N361.754 billion had been allocated to the local governments in January, these funds have yet to be distributed due to administrative bottlenecks. FAAC officials have urged local governments to submit the required information to avoid further delays.

In line with the ruling, the Nigerian Financial Intelligence Unit (NFIU) will closely monitor the usage of these funds, ensuring transparency, accountability, and good governance. Furthermore, a team of anti-corruption agents from the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) has been set up to oversee the use of the funds and take action against any misuse or diversion.

The move is seen as a significant step toward empowering local governments and ensuring financial independence at the grassroots level, with clear penalties for council chairmen who misuse or divert funds back to state governments.