Cbn Account Opening Procedures As Impediment To Enforcement Of Local Government Autonomy: So Much Ado About Nothing
By
Vincent Adodo
The moderator at the morning session of the Nigerian Bar Association (NBA)’s discourse on local government autonomy held on the 19th February 2025 at the NBA’s National Secretariat, Abuja took on the Director of the Legal Department of the Central Bank of Nigeria (CBN), Mr. Kofo-Alada (who was a guest) to explain what accounted on the part of the CBN for the delay in the enforcement of fiscal autonomy for local government councils in Nigeria as ordered by the Supreme Court in its celebrated judgment delivered in July 2024 on the local government autonomy case. Responding, the learned gentleman stated that the delay in direct disbursement of local government allocations directly to local government councils was occasioned by the failure/relunctance of democratically elected officials of local governments councils to approach the CBN to open dedicated accounts with it for the direct disbursement to them of their allocations.
In a recent issue, the Punch Newspapers reported that several local government council chairmen disclosed that their state governors have warned and threatened them against opening the dedicated accounts with the CBN, apparently a move to block the local government councils from receiving their allocations directly from the Federation Account. It was further reported that a local government council chairman from the South East region of the country lamented that not even the offer to surrender one half of the monthly allocation to his state governor (who had issued a similar threat) was enough to appease the governor to reconsider his stance on the account opening issue.
Section 287 (1) of the 1999 Constitution (as amended) which all public office holders (including state governors) swore to uphold compels every person and authority in Nigeria to enforce the judgment of the Supreme Court.
It is thus surprising and worrisome that several months after the apex court handed down the judgment, the political class has conspired to frustrate the implementation of the judgment through all forms of shenanigans.
According to the Punch report, an authorised official stated that local government councils in Nasarawa State have complied with the account opening procedures and are expectant that the direct payment to them of their allocation from the Federation Account would commence soon. This demonstrates that compliance with the CBN account procedures is neither impossible nor impracticable.
Apparently, elected officials of several local government councils are afraid to take steps to commence the CBN account opening procedure because of their ‘loyalty’ to their governors.
For example in Ondo State, despite the judgment of the Supreme Court, local government administration in the State has not become any better from it’s previous comatose state as the reality of local government fiscal autonomy still remains a mirage.
It is notable that local government councils in Ondo State are yet to open their dedicated accounts with the CBN with the State Government still holding on to local government funds through a joint account which houses all local government funds received from the federation account, an illegality.
Consequently, the local government system in Ondo State has not been any better than what it was before the judgment of the Supreme Court.
The local government officials recently elected in Ondo State apparently are starved of the required funds to put in place necessary infrastructures and other elements required to bring governance close to the grassroots as the monthly allocations of these councils are not released to their elected officials by the State Government who has been receiving them from the Federation account through a joint account pronounced illegal by the Supreme Court. Reliable information suggests that the recently elected local government officials in Ondo State are being handed paltry sums as salaries from Alagbaka, the seat of the State Government.
It is thus posited that Ondo State which now receives almost triple of the monthly statutory allocation it received under the immediate past Governor Rotimi Akeredolu, SAN in addition to 13% derivation funds has no reason to hold on to paltry local government allocations. Given the fact that some States have began and even completed the account opening procedures with CBN, Ondo State local government councils have no reason not to open the dedicated accounts with the CBN as there is nothing esoteric or difficult with the said procedure.
Consequently, it is the reasonable expectation of citizens and residents of Ondo State that soon, a paradigm shift would occur as local government fiscal autonomy is here to stay until the judgment of the Supreme Court is upturned or reversed.
Vincent Adodo, Esq., LL.M, FIMC, CMC
9th April 2025
