By LG Autonomy: Direct Transfers to LGAs Stalled Due to Lack of Dedicated Accounts
Following reports on the financial autonomy of local government areas (LGAs) in Nigeria, the much-awaited direct transfer of funds to the 774 local governments has failed to take off as planned in January 2025.
BlackBox Nigeria reported that the CBN ordered all LG chairmen to set up a dedicated account for easy flow of the much anticipated allocation for the first month of the year.
However, the delay stems from the absence of dedicated Local Government accounts with the Central Bank of Nigeria (CBN), which was a prerequisite for the direct transfers.
As a result, the funds are still being wired through the Joint Accounts Allocation Committee (JAAC), the only mechanism that had already handled financial allocations for LGAs together with the states.
Sources from the Local Government Chairmen told BlackBox Nigeria that despite previous assurances, the necessary infrastructure for the direct disbursement process has not been put in place, resulting in further postponement.
Meanwhile, local governments were supposed to start receiving their allocations directly from the Federation Account, bypassing the state governments, which have been accused of mismanaging or delaying funds intended for local administration this early month.
However, the failure to open the required accounts has stalled this crucial aspect of the reform.
The situation has raised concerns among local government leaders and stakeholders, many of whom argue that the continued use of JAAC fail to appreciate the intended autonomy and makes the local governments vulnerable to delays and misappropriation by their state governments.
