JAAC: Local Government on the verge of extinction Over Lack of Financial Autonomy
Falana tells DSS to release LG Chairman, Wale Adedayo
.. Advises Abiodun to go to court if…
By Our Correspondent
The local government is the closest administration to the people, but the inability of the country’s 774 councils to meet the two primary objectives as spelt out in the landmark Local Governments Reform of 1976, which are to promote participatory democracy and rapid socio-economic development at the grassroots, has made the citizens to lose trust in the third tier of government.
Salient Times reports that this dereliction of duty explains the clamour by many Nigerians for change in the local government system as presently constituted in order make the councils face present day realities as well as live up to the expectations of a majority of the populace, who live in the rural areas, and have continued to yearn for development.
While most analysts blame the nation’s faulty federal structure for the failure of the councils, others are of the view that the joint account run by the states and local governments is to be blamed for inability of the local government areas to meet their primary objectives.
Section 7(1) of the Nigerian Constitution guarantees a system of local government by democratically elected government councils.
However, the second component of the section makes the establishment, structure, composition, finance and functions of the local governments dependent on state laws.
The constitution also makes it possible for state governments to maintain a firm grip on the councils by routing funds standing to their credit in the Federation Account through states/local governments’ joint accounts rather than directly to them.
This arrangement has over time, adversely affected the financial viability of the local governments.
It is against this backdrop that some stakeholders have continued to call for the scrapping of the joint accounts to make way for financial autonomy for the councils but the states have resisted this move.
Under the 1999 Constitution (as amended), the federal and state governments are the federating units, while the local government areas are administrative units of the states.
This, perhaps, explains why attempts by the Federal Government in the past to check use of funds in the joint accounts operated by the states and local governments as slush funds failed to yield desired results.
This is as the controversy over the operation of the joint accounts have refused to subside. Whereas it was argued at inception that the operation of the joint accounts was meant to bring even development to all parts of the country and to curb corruption, the arrangement has over time, adversely affected the financial viability of the councils as some state governments have continued to make inexplicable deductions from the accounts.
Section 162 (8) of the Constitution, which explains how the amount standing in the account should be distributed to the local governments in each state, provided that “the amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.”
Sadly, this constitutional provision has continued to be breached as reports from across the country have it that some governors hand out only wage bills to the various council chairmen in their respective states, who in most cases, are appointed rather than elected as required by the law.
Immediate past President Muhammadu Buhari, in December 2022, confirmed the breach, when he accused some governors of unbridled ill-treatment of local governments’ administration and mismanagement of resources of the councils, causing what he termed stunted development experienced at the third tier of government and unfair labelling of his administration at the grassroots.
The then president, who bared his mind after he delivered a speech at an event hosted for members of the Senior Executive Course 44 (2022) of the National Institute for Policy and Strategic Studies (NIPSS) at the Presidential Villa, Abuja, cited a personal experience involving a governor he did not name.
Buhari said it beats anyone’s imagination how some governors would collect money on behalf of local councils in their states, only to remit just half of such allocation to the chairman, who would further deplete the remittance in further pilfering of public resources.
“If the money from the Federal Government to local government is N100 million, N50 million will be sent to the chairman, with a letter that he will sign that he received N100 million.
The governor will pocket the balance and share it with whoever he wanted to and then the chairman of the local government will see how much he must pay in salaries.
To hell goes development. Monies for the salaries will be given and the balance he will put in his pocket. This is what is happening.”
Devt in Ogun resonates Buhari’s concern
While some governors challenged Buhari, when he accused them of diverting local governments’ funds, recent development in Ogun State speaks volume of the former president’s claim.
The chairman of Ijebu East Local Government Area of the state, Mr. Wale Adedayo, recently dragged Governor Dapo Abiodun before the Economic Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) demanding the investigation of the governor over alleged mismanagement of local government funds.
Adedayo who has been suspended by the council’s legislative house, accused Governor Abiodun of withholding the statutory Federal Allocation due to the state’s local governments in the last two years.
He also claimed that the governor has not paid a dime into local government accounts as federal allocation also within the period as well as denying council chairmen of the Ecological fund and other entitlements due to them.
The separate petitions to EFCC and ICPC, read in part: “Your urgent intervention is sorely needed to convince the Ogun State governor, Prince Dapo Abiodun, that the statutory Federal Allocation to Local Governments in Ogun State should be allowed to reach each of them as envisaged by the 1999 Constitution.
“Since we (Ogun State local government chairmen) got on board in 2021, it has been ZERO Federal Allocation to each local government.
The 10 per cent of the state’s Internally Generated Revenue, which the constitution also stipulated should go to the local governments has not been given since Abiodun got into office.
You may want to deploy the instruments of your office to confirm the veracity of my claim as well.
“Former President Muhammadu Buhari assisted the states and Local Governments with what we call palliatives today. They called it, SURE-P. The first sent to the 20 local governments in Ogun State was N2.5 billion.
The second one was, N2.6 billion. The third was, N2.8 billion, while the fourth shortly before Buhari left office was N2.9 billion. Not a dime of these funds was released to ANY local government in Ogun State.
“The Ogun State Executive Committee of the Association of Local Governments of Nigeria (ALGON) had a meeting with the Commissioner for Finance, Mr. Dapo Okubadejo, early this year. The commissioner claimed that the 20 local governments were owing the Ogun State government N17 billion, which they continue to deduct. But I know for a fact that my Ijebu East Local Government is not owing Abeokuta one Naira!
Kindly use your good offices to verify this fact. “We have also heard about Ecological funds and others. These have developed wings too without trace. It is certain that the current one being packaged by President Bola Tinubu may likely follow the same course. “
And, we are the ones the people will abuse. I am the butt of jokes in my local government right now, with many saying one is incompetent. Meanwhile, the Federal Government regularly made these funds available, but it has NEVER been disbursed to us since we were sworn in.
“Truly, denying local governments their due Federal Allocations in Ogun State began during the administration of former Governor Ibikunle Amosun.
And, as it is happening today, it was based on a spurious claim of helping some local governments, who may not be able to fulfill their obligations to the people because of financial challenges.
“Thus, all the funds are regularly collected into a central purse from where salaries and other dues are paid. Whatever that is left is often claimed by the state government as debts being paid by the local governments.”
There is no doubt that successive administrations at the federal level in the present dispensation had made efforts to free the local councils from the grip of state governors.
The 7th National Assembly, for instance, through the House of Representatives, initiated a bill for an Act to amend not only provisions of Section 7 of the constitution, but also Section 162 in order to provide for independence and financial autonomy of the local governments.
The bill, sponsored by the then member representing Anaocha/ Njikoka/Dunukofia federal constituency of Anambra State, Uche Ekwunife, sought to amend the two sections to give the local governments’ independence and financial autonomy.
Ekwunife had in her presentation of the bill at that time, lamented the level of underdevelopment at the local governments across the country, owing to neglect by the various state governments.
She queried the need for the councils if they only exist to pay salaries.
The bill passed second reading and was consequently committed to the House ad-hoc Committee on Constitution Review for further legislative action, but nothing meaningful came out of it.
Similarly, a proposal by the then Peoples Democratic Party (PDP)- led Federal administration for the scrapping of the joint accounts also suffered similar fate.
The PDP administration at that time said it would not tolerate diversion of funds meant for the development of the grassroots. But the then main opposition party, Action Congress of Nigeria (ACN), advised then President Goodluck Jonathan to jettison the proposal.
The party argued that scrapping the accounts and allocating the councils’ share from the federation account directly to them would amount to making them federating units.
It was therefore not surprising when state Houses of Assembly voted against the proposal for financial autonomy for the local councils during the constitution amendment by the 7th National Assembly.
It was another botched bid in 2017 during another amendment to the constitution. Whereas the Senate and House of Representatives voted in favour financial autonomy the local councils, the states Houses of Assembly turned down the proposal.
The Senate in particular, not only voted for alteration to section 162 of the Constitution to abrogate the state/ local joint accounts and empower each local government to maintain its own “special account into which all allocations due to the council shall be directly paid from the Federation Account and from the government of the state,” but equally favoured a review the constitution to make democratic composition of local councils statutory.
This was aimed at ensuring that any local government without elected officials would not get federal funding.
While commendations trailed the position of the federal legislators then, some discerned minds, cautioned that it was not yet Uhuru given the rigorous amendment process to the Nigerian constitution.
The constitution requires approval of two/thirds of the state legislatures even after an amendment is passed by both chambers of the National Assembly.
It was against this backdrop that that the proposed amendments as voted for by the National Assembly were sent to the 36 state Houses of Assembly for consideration and concurrence. As envisaged, the amendment that would have freed the local councils from the grip of the states failed to scale the hurdle at the state level. Twenty-seven out of the 36 states of the federation rejected autonomy for the local governments. Only nine endorsed the proposal. The states that gave yes votes were Ogun, Ondo, Niger, Benue, Plateau, Bauchi, Cross River, Kwara and Bayelsa. Then Speaker of the House of Representatives, Yakubu Dogara, who decried the rejection of autonomy for the councils said: “I will say that I am a bit disappointed because we would have delivered the long-awaited local government autonomy, but unfortunately, maybe our courage did not go that far.
“This is an exercise that is ongoing. I believe that as this one failed this time, maybe next time, as state Houses of Assembly are now independent, they would be able to extend this same independence to the local governments. We all know the benefits of freeing the three tiers of government. So, please let us go ahead and do it.” Perhaps, only a few would have expected that the state legislatures will concur with their federal counterparts given the grip governors have on them. Then National President of National Union of Local Government Employees (NULGE), Ibraheem Khaleel, who acknowledged that the proposal for autonomy for the councils would be a hard sale, accused some governors of the All Progressives Congress (APC) extraction of influencing members of their states Assembly to reject the bill.
NFIU law
However, what seemed a temporary relief came, when the Buhari administration announced a new order to make it compulsory for all local governments allocations to go straight to their respective bank accounts. The directive was aimed at ensuring that the joint account system only exists for the receipt of allocations from the federation account but not for disbursement. The decisions, contained in a guideline released by the Nigerian Financial Intelligence Unit (NFIU) after a meeting with officials of commercial banks in May 29, was entitled: “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria, effective June 1, 2019.” Though the directive was applauded, a legal hurdle was anticipated as Section 162 (8) of the 1999 Constitution empowers the states to distribute allocation to councils “among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.”
As predicted, the Nigerian Governors Forum (NGF) sued the Federal Government and NFIU for interfering with state government powers to initiate transactions on the joint accounts. However, the Federal High Court, Abuja, dismissed the suit. Justice Inyang Ekwo, who delivered judgement in the suit marked: FHC/ ABJ/CS/563/2019, held that the case of the plaintiffs lacked merit. According to the judge, the plaintiffs did not show how the NFIU’s guidelines contradict or conflict with the provision of Sections 7(1), (6) (a) and (b) of the constitution. “I am also unable to see how the provisions of the 2nd defendant (NFIU)’s guidelines contradict or conflict with the provisions of Section 162(6) of the constitution which creates the ‘State Joint Local Government Account’ into which allocations to the local government councils of the state from the Federation Account and from the government of the state shall be paid,” he said. The court further held that the guidelines did not contradict Section 162(8) of the constitution which prescribed that the amount standing to the credit of the local government council of the state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.
Botched bid by 9th NASS Despite the NFIU’s threat of sanctions as well as the judgement of the court, there is no doubt that the states still maintain their firm grip on the finances of the councils. This explained why autonomy for the local governments was among the priorities, when the 9th National Assembly commenced another amendment to the 1999 Constitution. The constitution review committees of the 9th National Assembly were headed by Ovie OmoAgege (Senate) and Ahmed Idris Wase (House of Representatives) and it was not surprising that members voted overwhelmingly in support of the bill after a clauseby-clause consideration of the recommendations of the Joint Committee on the 1999 Constitution (5th Alteration) Bills, 2022. Ninety-two out of the 109 senators voted in favour of the local government autonomy bill in the Red Chamber, while 257 out of 360 voted in support in the Green Chamber. The legislation was entitled: “Bill for an Act to alter the Constitution of the Federal Republic of Nigeria, 1999 to abrogate the state joint local government account and provide for a special account into which shall be paid all allocations due to local government councils from the Federation Account and from the government of the state; and for related matters.”
According to the bill, “each local government council is to create and maintain its own special account to be called Local Government Allocation Account into which all the allocations will be paid.” The bill also mandates each state to pay to local governments in its area of jurisdiction such proportion of its Internally Generated Revenue (IGR) on such terms and in such manner as may be prescribed by the state House of Assembly. On administrative autonomy, the bill sought to allow local governments to conduct their own elections. While it was commendations for members of the National Assembly for passing the local government autonomy bill, the bill was sent to the states as twothird of the 36 states legislative Houses must be in concurrence with the National Assembly before any amendment to the constitution becomes effective. Again, the states Assembly rejected the proposed autonomy for the councils. Incumbent National President of NULGE, Ambali Olatunji, who described the developments as a deliberate act by the governors and the state Houses of Assembly to deny the grassroots of effective leadership, also bemoaned insistence of most of the governors to run affairs of the councils with transition chairmen. He said these have created room for the diversion of resources available for meaningful growth and development at that subnational level by the governors. On a way out, he said: “The Federal Government must have the courage to take punitive action against such violation of Section 7 of the 1999 Constitution as amended. There are many court judgements against this even by the Supreme Court that outlaw such illegality.”
Arguments for and against autonomy for LGs
The debate over autonomy for the councils has been a recurring decimal but some political stakeholders have always insisted that as a federal state, Nigeria has three tiers of government – federal, state and local – whose intergovernmental relations, which include political, financial, judicial and administrative, are established by the constitution. They further maintained that each tier is required to operate within its area of jurisdiction and any action to the contrary is null and void to the extent of its inconsistency with the law.
This, they claimed, guarantees the autonomy of each tier. This positions, notwithstanding, there are other stakeholders, including NULGE, who have persistently called for urgent steps to be taken to save the local governments from extinction. NULGE, for instance, solicited the support of former President Olusegun Obasanjo (initiator of the 1976 Local Government Reform) in 2018 to rescue the councils from the governors. Obasanjo, who agreed with the union that state governments have incapacitated the councils, wondered whether the states could allow the federal government to do the same to them. His words: “There is no exception to this encroachment by states. Even though both are supposed to be separate tiers of government, with each having its roles and functions, that is not the case anymore. I wish I could help, but I am helpless. As it is, I can only help you to shout and talk to the world. “I do not have any executive or legislative power. I am crippled.
But we shall continue to talk until those who are reasonable among them change this attitude. I begin to wonder if they (states) can allow what they are doing to the local governments to be done to them.” Another former leader, who once voiced out against the structural defect at the local government level is ex-Military President, General Ibrahim Babangida. He maintained that financial autonomy for the councils is the only way to the nation’s rapid development. Babangida maintained that development would be even and sustained if allocations meant for the various local governments are released to them directly although he added that they should be made to account for how the funds are spent by way of monitoring the various projects initiated and executed to maintain quality. A former Minister of Finance, National Planning and Transport, Dr. Kalu Idika Kalu, who shares Babangida’s view told New Telegraph in an interview that Nigeria get the structure of the local government right for efficient development of the country. His words: “Let’s get the structure of the constitution right, let’s get the structure of our local governments right, let’s focus more on development units as I have advocated for years. This issue of geopolitical zones has been rubbished over the years. What really counts is that everybody comes from a local government. So, we should divide up the country into local governments that will be capable to take up any function. After that, whether it is state or zone will be of less important. “So, my emphasis is: Let’s restructure the constitution, restructure the local governments in such a way that they will be more or less equal, let’s say 50,000 or 60,000 people per local government across the entire states, and maybe we will get less half the number of local governments that we have now. From there, we can organise them into states and geopolitical zones.” The governor of Anambra State, Charles Soludo, who slightly deferred on recognition of local governments as a tier of government, however called for their strengthening based on the unique needs of each state. Soludo, in a television interview on his position on granting autonomy to the councils said: “The way the constitution is written is one thing, but whether what the constitution states is efficient or it is the best is another question. What we do in Anambra State is that we strengthen the local governments, so that they would give the people the dividends of democracy. “We rely increasingly on the local governments to get what we are doing, be it in areas of waste management, street lights and its management, be it in the area of managing the environment, we are cascading what used to be done by the state down to the local governments. “We will strengthen and continue to strengthen the hands of the local governments, even if the designers of the constitution did not give them absolute autonomy.
There is no absolute autonomy anywhere. Even states that we think are autonomous of the Federal Government, we have one economy, one country and this is how we work. But I believe that we need to strengthen the local governments. “On the status of the local governments, let’s go back to the First Republic and to the federations around the world, I don’t know any other federation in the world, where the constitution created the third tier of government. The way it is enshrined in our constitution is as if we have three federating units; the federal, states and the local governments.
“The issue of local governments should be a matter for each of the federating unit to decide what type of local governments it wants. To impose this unitary and common local government all over the country, I don’t think it’s okay…. the local governments should be excised from the constitution that each state should decide the kind of local governments that it wants. “In my state, for example, we might decide that the local government that works, that delivers directly to the people is community government. Another state might decide otherwise, so you have two federating units and the units would decide on the local governments that they want.” While many Nigerians have continued to wonder how the seeming ambiguities in the constitution, which have aided the state governments to divert funds meant for the local councils would be tackled, it is left to be seen if the Tinubu administration and the 10th National Assembly led by Godswill Akpabio (Senate) and Tajudeen Abass (House of Representatives) will be able to convince the governors and state Houses of Assembly to support autonomy for the councils during the next amendment to the constitution.
Release Suspended Ogun LG Boss, Falana Tells DSS
Meanwhile, a Senior Advocate of Nigeria (SAN), Femi Falana, has asked the Department of State Services (DSS) to release detained suspended Chairman of the Ijebu East Local Government in Ogun State, Wale Adedayo.
In a statement on Sunday, Falana said Adedayo was invited to the Ogun State Command of the secret police on Friday.
“However, when he (Adedayo) turned up for the invitation on 1st September 2023, he was asked to respond to the petition submitted to the Command by the State Government,” the senior lawyer said.
“In the said petition, it was alleged that Mr. Adedayo had instigated widespread acts of public disturbance and chaos in Ijebu East Local Government. Even though the embattled Council boss denied the allegation of instigating acts of public disturbance, the State Security Service has decided to detain him due to his refusal to withdraw the allegation levelled against Governor Abiodun.”
Falana said though the Ogun State Government has denied the allegation of funds diversion, the governor should sue Adedayo for libel in the Ogun State High Court.
“Having regards to the facts and circumstances of this particular case, I am compelled to request the Ogun State Command of the SSS to release Mr. Adedayo from custody forthwith,” he said.
