In a major development affecting Nigeria’s third tier of government, state governors across the federation have reportedly implemented measures preventing elected local government chairpersons from opening accounts with the Central Bank of Nigeria (CBN) to access funds from the federation account.
Multiple sources within the Nigeria Union of Local Government Employees (NULGE) confirmed that this move has effectively created a financial bottleneck for council administrations nationwide, despite a Supreme Court ruling affirming local government autonomy earlier this year.
“The situation has become increasingly frustrating for democratically elected council chairmen who are finding themselves unable to fulfill their constitutional mandates,” said a senior NULGE official who requested anonymity due to the sensitive nature of the issue.
According to our investigations, several governors have allegedly directed their state’s accountants-general to maintain sole control over council funds, effectively forcing local government funds to pass through state-controlled “joint accounts” before reaching local authorities. This arrangement allows state governments to determine what percentage of allocations eventually trickles down to the grassroots.
A council chairman from one of the South-South states, speaking on condition of anonymity, he said: “We have been attempting to implement the direct allocation framework as directed by the Supreme Court and NFIU guidelines, but we’re meeting significant resistance at the state level. When we approached the CBN to open the required accounts, we were informed that approval from the state government was necessary approval that has been systematically denied.”
Financial experts have expressed concerns that this situation perpetuates the longstanding problem of state interference in local government affairs, which has historically undermined grassroots development in Nigeria. The practice appears to contradict both the spirit of the Supreme Court judgment on local government autonomy and the guidelines issued by the Nigeria Financial Intelligence Unit (NFIU) regarding direct allocation to councils.
The Association of Local Governments of Nigeria (ALGON) has reportedly begun consultations with legal experts to challenge what they describe as an “unconstitutional obstruction” of funds meant for grassroots development.
“What we’re witnessing is essentially financial strangulation of the third tier of government,” said a political analyst familiar with governance issues. “The real victims are ordinary Nigerians at the grassroots who depend on functioning local governments for basic services.”
When contacted, several governors’ spokespersons declined to comment directly on the allegations but emphasized that state governments maintain oversight responsibilities as established by law.
The Minister of Finance has yet to make an official statement regarding the controversy. However, sources within the ministry indicated that the federal government is monitoring the situation closely and may consider intervening if the impasse continues to threaten governance at the local level.
As this situation unfolds, stakeholders are calling for a clear interpretation and implementation of existing laws to ensure that Nigeria’s constitutional democracy functions effectively at all levels of government.
Governors Restrict Local Council Chiefs From Accessing Federation Accounts
