Nearly two years after Nigeria’s Supreme Court ordered the direct payment of federal allocations to local government councils, implementation of the landmark judgment remains incomplete, despite councils receiving N10.48 trillion in statutory allocations during the period.
An analysis of Federation Account Allocation Committee (FAAC) reports, using data from the National Bureau of Statistics (NBS) and the Office of the Accountant-General of the Federation, shows that local government councils received N10.479 trillion between the July 2024 and June 2026 FAAC meetings. The allocations covered revenue generated between June 2024 and May 2026, as FAAC distributes revenue one month after it is collected.
The funds were disbursed against the backdrop of continuing uncertainty over the implementation of the Supreme Court’s judgment of 11 July 2024 in Attorney-General of the Federation v. Attorney-General of Abia State and 35 Others (SC/CV/343/2024).
In its ruling, the Supreme Court directed the Federal Government to pay allocations for Nigeria’s 774 local government areas directly into council accounts. It also prohibited state governments from retaining or spending funds allocated to local authorities and declared the administration of councils by unelected caretaker committees unconstitutional.
However, nearly two years later, uncertainty remains over whether allocations are being transferred directly to local government accounts, whether State Joint Local Government Accounts are still in operation and whether councils have gained effective control over their finances.
Rising Allocations
The analysis indicates that allocations to local governments increased significantly during the second year following the judgment, although this has not been accompanied by clear evidence of nationwide compliance or noticeable improvements in local service delivery.
Between July 2024 and June 2025, councils received N4.496 trillion. This rose to N5.984 trillion between July 2025 and June 2026, an increase of N1.488 trillion, or 33.1 per cent.
Average monthly allocations also increased from N374.65 billion during the first 12-month period to N498.67 billion in the second, representing an increase of N124.02 billion.
Monthly allocations ranged from N306.53 billion to N434.57 billion during the first year, while figures in the second year fluctuated between N444.85 billion and N540.15 billion before easing slightly to N534.28 billion in June 2026.
Continuing Dispute Over Joint Accounts
The controversy centres on the State Joint Local Government Account established under Section 162 of the 1999 Constitution, under which local government allocations are channelled through accounts jointly managed with state governments.
For many years, council officials, labour unions and civil society organisations have alleged that governors deduct funds from local government allocations, control expenditure and leave councils without adequate resources to provide essential public services.
Although the Supreme Court ruling sought to end the practice by requiring direct payments to democratically elected councils, concerns remain that the financial relationship between state governments and local authorities has changed little in many parts of the country.
The issue has also attracted attention at community level. In Oriire Local Government Area of Oyo State, residents recently renewed calls for improved security, telecommunications, healthcare, education and road infrastructure following the release of abducted pupils and teachers. Community members questioned why basic infrastructure remained inadequate despite years of federal allocations to local governments.
National Allocations
FAAC data also showed that a total of N42.709 trillion was shared among the Federal Government, state governments, local government councils and oil-producing states as derivation revenue during the 24-month period.
The Federal Government received N14.620 trillion, representing 34.23 per cent of the total, while state governments received N14.506 trillion, or 33.96 per cent. Local governments accounted for N10.480 trillion, equivalent to 24.54 per cent, while oil-producing states received N3.103 trillion as 13 per cent derivation revenue, representing 7.27 per cent.
Allocations increased across all tiers of government during the second year under review. Federal Government allocations rose by 47.34 per cent, state allocations increased by 35.14 per cent, and derivation payments to oil-producing states increased by 6.19 per cent.
Overall allocations rose from N18.081 trillion during the first 12 months to N24.628 trillion in the second, an increase of 36.21 per cent.
NULGE Raises Concerns
The National Union of Local Government Employees (NULGE) said the Federal Government had yet to begin implementing direct payments to councils as required by the Supreme Court judgment.
NULGE National President Aliyu Kankara said the union had repeatedly written to the Federal Government urging compliance but that little had changed since the ruling.
He said state governments continued to receive local government allocations, adding that financial autonomy could not be regarded as implemented until councils received their statutory allocations directly.
Following the judgment, President Bola Tinubu directed relevant ministries and agencies to implement the ruling. The Federal Government subsequently established an inter-ministerial committee comprising representatives of the Office of the Secretary to the Government of the Federation, the Ministry of Finance, the Office of the Accountant-General of the Federation, the Central Bank of Nigeria and the Office of the Attorney-General of the Federation to develop procedures for direct payments and resolve legal and administrative challenges.
Mixed Compliance Across States
Findings from several states suggest that implementation remains inconsistent.
Officials in Kaduna, Kano, Benue, Plateau and Sokoto said local governments continued to operate under the joint-account system, with councils receiving funds released by state governments rather than direct transfers from the Federation Account. Several officials, speaking anonymously, said governors continued to approve expenditure and control the release of funds for local projects.
In Benue, local government officials said efforts to open Central Bank accounts had been hindered by administrative requirements involving the state government. Some also argued that the constitutional provision establishing the joint account would need to be amended before full autonomy could be achieved.
In Abia State, local governments were reported to operate independent bank accounts, although officials said the Federal Government had yet to provide clear guidance on implementing the Supreme Court judgment. State officials said the status quo largely remained unchanged.
Jigawa State appeared to be an exception. The state’s Association of Local Governments of Nigeria (ALGON) chairman, Sibu Abdullahi, said all 27 local government councils now receive their allocations directly from the Federal Government without deductions by the state government.
According to him, the councils operate independent bank accounts and the arrangement has improved transparency and enabled faster responses to local development needs.
Awaiting Federal Response
The contrasting experiences across states suggest that implementation of the Supreme Court’s judgment remains uneven, with some states reporting direct transfers while others continue to operate the previous joint-account system.
The findings also support NULGE’s position that the judgment has yet to deliver the uniform financial independence for local governments envisaged by the Supreme Court.
The Office of the Accountant-General of the Federation and the Federal Ministry of Finance had not provided substantive responses to requests for comment at the time of publication.
