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Confusion in Lagos as FG Plans Direct Payment to LGAs
Ghazali Ibrahim
The Federal Government’s decision to implement direct payments to local government areas (LGAs) across Nigeria through CBN account opening to receive allocations this January has sparked controversy and uncertainty in Lagos State.
The financial autonomy, which bypasses state governments and channels funds straight to LGAs, has been met with mixed reactions from stakeholders across various sectors particularly in Lagos State with another sub-division of local council development authority.
This development follows Supreme Court’s July 11, 2024 landmark judgement, affirming the financial autonomy of the country’s 774 local government areas.
Despite the verdict, reports indicate that governors have continued to manage LGA funds six months after the judgement.
Prior to the judgement, LGAs earned from the state government through joint accounts, where federation allocations were deposited, thereby leading deductions or alleged mismanagement by state governors.
However, the recent development of creating accounts with CBN by the LGAs seemed a good news on one hand and otherwise for the LCDAs which only exist in Lagos State.
Local Council Development Authority (LCDAs) were created by Bola Ahmed Tinubu when he was the governor of Lagos State during President Olusegun Obasanjo administration. The latter refuse to release state allocation, stating that only 20 LGAs will be catered for, as the creation of LCDAs is not recognized by the constitution
However, critics in Lagos have raised concerns over potential disruptions in the governance structure, as state governments traditionally oversee LGAs and LCDAs activities though the latter not recognized by the constitution.
They fear this policy could create jurisdictional conflicts, weaken state control, and lead to accountability issues at the local level.
The confusion intensifies with the direct allocation which will be made to the constitutionally recognized local government while the local council grapples with funding. However, the state government is yet to issue statements on how they will be funded.
Local government officials have expressed optimism about the direct funding, seeing it as an opportunity to implement projects without interference.
Meanwhile, the state government talked about the conduct of elections in the local council but no statement on whether the LGAs allocation will be shared with them or not. It also warn that the lack of proper oversight could result in mismanagement of public funds.
