State governors across the country have reportedly cautioned local government chairmen against opening accounts with the Central Bank of Nigeria (CBN), a move intended to facilitate the direct disbursement of federal allocations to local councils.
This development marks a setback in the implementation of local government autonomy, nearly nine months after the Supreme Court ruled in favor of granting full financial independence to Nigeria’s 774 local government areas.
In compliance with the ruling, the Federal Government constituted a committee to oversee the execution of the autonomy directive. One of the panel’s key recommendations was for the CBN to establish accounts for each local government to enable direct transfers from the Federation Account.
Discussions regarding the practicalities of opening these accounts have already begun, led by former Accountant-General of the Federation, Oluwatoyin Madein, and the Minister of Justice and Attorney-General of the Federation, Lateef Fagbemi (SAN). However, challenges have emerged, particularly in verifying which local governments are administered by democratically elected officials.
At a recent meeting of the Federation Account Allocation Committee (FAAC) Technical Sub-Committee, it was revealed that only local governments in Delta State had so far submitted the necessary banking details.
Several local government chairmen, speaking anonymously, disclosed that some state governors are actively discouraging or even threatening them against opening the CBN accounts. The reason, they claim, is to preserve the governors’ control over local council funds.
One chairman from a South-East state said their governor rejected a proposed arrangement where half of their monthly allocation would still be returned to the state if the CBN accounts were allowed to be opened.
“Our governor warned all the chairmen not to proceed with opening accounts at the CBN,” the chairman said. “We even tried to negotiate—suggesting we remit 50 percent of our allocation to him monthly—but he refused. So, everything is on hold.”
Further findings suggest that governors fear losing access to local government revenues, a long-standing source of financial leverage for many state administrations.
Another chairman told Punch that the CBN’s conditions for account opening—though not unreasonable—are difficult for most councils to fulfill, particularly given how allocations are currently managed by the states.
A council chairman in the South-West region revealed that local councils in his state were unable to meet even a basic CBN requirement: providing two months’ worth of account statements.
“It sounds simple, but the reality is most LGAs can’t provide those statements because they don’t have direct access to their funds,” he explained. “Governors are in charge of spending the allocations and only pass down what they choose.”
