Last Thursday’s judgement by the Supreme Court granting financial autonomy to local government councils marks a significant shift in the country’s governance structure, aiming to reduce the influence of state governors over local administrations, public affairs expert has said.
In a statement on Monday, Founder/Chief Strategist of The Rainbow Strategy, Mr. Franklyn Ginger-Eke, the judgement was a bold decision on local government financial autonomy, which, he said, is a significant step towards strengthening grassroots governance and enhancing local government development. “This decision is expected to provide local governments with greater control over their finances, enabling more effective and responsive service delivery to their communities. The move aligns with the broader goals of promoting transparency, accountability, and good governance at all levels of government. The Rainbow Strategy views this ruling as a crucial milestone in the journey towards a more decentralised and empowered local government structure in Nigeria”, Ginger-Eke further said.
He added that, when implemented, the decision would channel funds directly to local governments from the Federation Account, bypassing state governments, to ensure that local councils have the resources to fulfil their roles effectively.
“A comparison of the federal system of government in Nigeria with federalism in the US and other federated democracies provides great insights that could guide the National Assembly and relevant governmental institutions in strengthening the local government system”, he said.
Ginger-Eke explained that the United States, for instance, operates under a clear separation of powers across federal, state, and local governments. Each level of government has distinct and constitutionally defined powers and responsibilities.
He said: “Local governments in the US enjoy a high degree of autonomy. They can levy taxes, enact local laws, and manage local services independently of state governments. State constitutions and laws often define the powers of local governments, but local councils have significant operational freedom. On financial independence, local governments in the US receive funding through local taxes (property, sales, etc.) and federal/state grants. There is no intermediary state control over these funds, ensuring direct financial autonomy.
“Similarly, in other federated democracies like Germany and Australia, the role of local governments is statutory. For instance, local governments (municipalities) have constitutionally guaranteed self-governance. They manage local affairs independently, with financial resources derived from local taxes and shared revenues from state and federal levels. In Australia, local councils in Australia operate under state legislation but maintain a degree of independence in managing local issues. Funding is sourced from local taxes and state/federal grants, similar to the US model.
“In contrast with Nigeria’s federalism, local governments have historically been under significant control by state governments, particularly regarding financial allocations and administrative appointments. This has often led to inefficiencies and corruption.
“The ruling of the Supreme Court aims to rectify these issues by ensuring local governments receive their funds directly from the federal level, bypassing state governments, which previously had control over disbursement and often mismanaged these resources. The implications of the judgement mean that the autonomy granted could improve local governance by enabling councils to address local needs more efficiently and transparently. However, despite the intended benefits, there are concerns about the readiness of local councils to handle financial independence responsibly. Issues such as low voter turnout in local elections and potential mismanagement remain.
“In effect, the Supreme Court’s decision is a step towards enhancing federalism in Nigeria by empowering local governments, akin to the autonomy seen in other federated democracies like the US and Germany. However, the effectiveness of this autonomy will depend on the implementation and capacity-building at the local level.
“However, serious consideration must be given to some key challenges in moving forward with the Supreme Court’s interpretation of a constitutional provision.
“First is the resistance from state governments. State governments have controlled local government funds through joint accounts, allowing them influence over local councils. The Supreme Court judgement disrupts this power dynamic, likely leading to resistance from governors who may lose control over significant financial resources. The second challenge is the issue of political influence because state governors often use local government funds to strengthen their political influence. The shift in financial control may face pushback from entrenched political interests within the states. We are already seeing such pushback, even from a former governor, an ex-convict who served time in a British jail for years for corruption, embezzlement and money laundering.
“The administrative capacity of the local government system is another important area, especially operational readiness. Many local governments in Nigeria lack the administrative capacity and experience to manage funds independently. This includes handling budgets, planning, and executing development projects effectively. There is the issue of corruption and accountability. There is a risk of corruption and mismanagement at the local level, given the historical precedents and existing challenges in governance. Ensuring transparency and accountability will be crucial.
“A key challenge is the area of voter engagement and low voter turnout. Local elections in Nigeria often suffer from low voter turnout and public disengagement. This apathy can undermine the legitimacy and effectiveness of local governments. Ensuring free and fair elections at the local government level is essential. Without robust electoral processes, local governments may continue to be plagued by issues of legitimacy and representation.
“Another area worthy of serious consideration is the legal and institutional framework, especially implementation and enforcement because translating the Supreme Court judgement into practical changes would require robust legal and institutional frameworks. This includes clear guidelines on fund disbursement, oversight mechanisms, and capacity-building initiatives.
“Yet, the Supreme Court judgement presents enormous opportunities for improving governance.
“The judgement will enhance local development based on direct fund utilisation. With financial autonomy, local governments can directly allocate resources to address local needs, leading to more targeted and effective development initiatives. This can significantly improve infrastructure, healthcare, and education services at the grassroots level. It will also strengthen democracy in Nigeria as greater accountability implies financial autonomy can foster greater accountability as local governments will be directly responsible for their budgets and expenditures. This can encourage more transparent governance and reduce corruption.
“Another significant opportunity will be increased civic engagement, which empowering local governments can lead to and encourage public participation in local government affairs, as citizens see more direct impacts of governance on their daily lives. Also, the capacity-building opportunity in training and development to enhance the administrative and managerial skills of local government officials.
“This judgement could also improve overall governance and service delivery with innovative governance models. Autonomous local governments can serve as laboratories for innovative governance models and best practices, which can be replicated across other regions. This includes leveraging technology for better service delivery and citizen engagement. Also, there’s the possibility of a reduction of state-level corruption and transparent fund allocation. Direct allocation of funds to local governments can reduce opportunities for corruption at the state level, ensuring that more resources are used for their intended purposes.
“In summary, while the implementation of the Supreme Court judgment on financial autonomy for local governments in Nigeria faces significant challenges, it also opens up numerous opportunities for enhancing local governance, improving service delivery, and strengthening democratic practices. Addressing these challenges effectively will require concerted efforts from all levels of government, civil society, and international partners”.
