FG Disburses N1.2tn to LGs via States, Defies Supreme Court Order on Direct Funding

• FG disbursed N1.232 trillion to local governments through states in Q1 2025, despite a Supreme Court ruling mandating direct payments to LGAs.

• The continued bypass of this directive has sparked criticism, with ALGON accusing the Federal Government of deliberately stalling local government autonomy.

Despite a Supreme Court ruling mandating that local government allocations be paid directly to their accounts, the Federal Government has continued to channel funds through state governments, disbursing a total of N1.232 trillion in the first quarter of 2025.

According to data from the Federation Account Allocation Committee (FAAC), local governments received N434.57 billion in January, N410.56 billion in February, and N387 billion in March.

This amounts to 24.8% of the total N4.959 trillion shared among federal, state, and local tiers during the period.

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The disbursements were based on revenues from statutory allocations, VAT, Electronic Money Transfer Levy, and augmentation funds.

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The Supreme Court had in July 2024 ruled in favor of direct LGA funding to ensure autonomy. However, the Central Bank cited the lack of audited accounts for many councils as a reason for not opening dedicated accounts.

The Association of Local Governments of Nigeria (ALGON) has since taken the matter to court, accusing the Attorney-General’s office and others of blocking implementation. “When the Supreme Court gave its judgment, everybody was happy. But up till now, the money has not started coming directly to the local governments,” ALGON Secretary-General Mohammed Abubakar lamented.