UPDATED: LG Autonomy: Supreme Court Bars States From Collecting LGA Funds

The Supreme Court has declared that the state government collection of funds meant for local government areas (LGAs) is unconstitutional. A seven-man panel of the Supreme Court on Thursday delivered the ruling.

Justice Emmanuel Agim, gave this verdict while delivering judgement in the suit marked: SV/CV/343/2024, which was filed by the Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi, SAN, against the 36 state governors seeking full autonomy for the 774 local governments in the country.

The court’s decision sets a precedent, stating that states’ retention of funds from the federation account on behalf of local governments is a violation of Section 162 (4, 5 and 6) of the constitution.

The federal government had argued that the constitution grants local governments autonomy and that states’ interference with their funds is illegal.

In the suit on 27 grounds, the federal government accused the states of abuse of power, seeking “an order prohibiting state governors from unilateral, arbitrary and unlawful dissolution of democratically elected local government councils”.

The 36 states, on the other hand, had opposed the suit, urging the court to dismiss it for lack of jurisdiction.

The apex court held that the power of the government is in three arms – the federal, the state and the local government.

The court further declared that a state government has no power to elect a caretaker committee and a local government council is only recognisable with a democratically elected government, stating that doing so will amount to a breach of the 1999 constitution.

“A democratically elected local government is sacrosanct and non-negotiable.

“Henceforth, no more payment of the local government area allocation to the state government accounts.

“I hold that the plaintiff’s request is hereby approved and all the reliefs granted,” Justice Agim ruled.

The Supreme Court thereby dismissed all preliminary objections in the suit.

This ruling grants financial autonomy to local governments, enabling them to manage their funds independently and receive allocations directly, bypassing state governors.