Autonomy: LGs Move To Open CBN Accounts

Autonomy: LGs Move To Open CBN Accounts

By Fly Cable News

Local governments across Nigeria have commenced the process of opening accounts with the Central Bank of Nigeria in preparation for receiving direct federal allocations starting this January, Sunday PUNCH has learnt.

This development follows the Supreme Court’s July 11, 2024 landmark judgment, affirming the financial autonomy of the country’s 774 local government areas.

The apex court declared as unconstitutional the practice of state governors controlling local government funds and directed that allocations be paid directly into LG accounts.

Despite the verdict, reports indicate that governors have continued to manage LGA funds six months after the judgment.

Previously, LGAs operated joint accounts with state governments, where federation allocations were deposited, often leading to deductions or alleged mismanagement by governors.

Speaking with Sunday PUNCH on Friday, the National Publicity Secretary of the Association of Local Governments of Nigeria, Hamisu Anani, confirmed that LGAs would open accounts with the CBN as part of the preparatory process.

Anani noted that while progress was being made, certain challenges remain, particularly for states where the CBN does not have a physical presence.

He said, “The committee that sat down yesterday with the governors, the attorney general, the commissioners for finance, the account generals of the state sat down and looked at it very well.

“For them to see the necessity of this thing to move very fast and then for the implementation to go well, and as quickly as possible, as promised, to see that it can come up this month.

“When you look at it very well, some of the states even don’t have central banks. Then the ALGON is looking at ways to see how they can open accounts with the central bank.”

When asked if what he implied was LGs had started opening accounts in anticipation of the allocations directly, he said, “Yes, we are looking to go on that process to see that we can do away with it so that the money comes up.

“Other processes are involved also, which the committee at the meeting that held on Wednesday to see that this thing is being done successfully.”

He added that ALGON had been actively engaging key stakeholders, including state governors, finance commissioners, and the Attorney General of the Federation to address concerns.

Anani said, “It is not just about implementation but also sustainability. The Supreme Court’s judgment has gaps that need to be addressed, and we are working to ensure everything is in place.

“We are hoping and looking at it very well to see that even if the implementation goes on, sustainability is very key for us to look into it. Because once it is not sustained, there will be a problem.

“All we are after is not only the implementation, but the sustainability of the implementation. That is why it took up to this time that the relevant stakeholders are involved in this implementation process now, working day and night to see that the right thing is done.“