Local governments across Nigeria are encountering a fresh challenge in their bid to receive monthly allocations directly from the Federation Account, as the Central Bank of Nigeria (CBN) now requires a two-year financial audit from each of the 774 councils before processing direct payments.
Initially, direct disbursement of funds was set to begin last month. However, due to the failure of many local governments to submit the required financial details, their share of N361.754 billion from the N1.424 trillion distributable revenue was routed through state governments instead.
The CBN has begun opening accounts for local governments to facilitate direct remittances, following the Supreme Court’s ruling in favor of financial autonomy for local councils. However, concerns remain over whether councils can meet the audit requirement before the February meeting of the Federation Account Allocation Committee (FAAC), where new disbursements will be finalized.
A source at the CBN emphasized the importance of the audit process, stating, “We cannot just open fresh accounts for the LGAs when many of them have not operated as an independent government entity.”
Meanwhile, an Inter-Ministerial Committee led by the Secretary to the Government of the Federation (SGF) is working on a framework to implement the Supreme Court’s decision on local government autonomy. A committee member disclosed that a template is being developed to allow the Accountant General of the Federation (AGF) to directly deduct and transfer funds meant for key services—such as primary education and healthcare—to the relevant agencies.
With the next round of allocations approaching, local governments must act swiftly to meet the new requirements or risk further delays in accessing their funds.
(NATION)