Reported by Afilawos Magana Sur, Managing Editor | Journalist at Sele Media Africa
ABUJA, Nigeria — State governments across Nigeria retained N1.46 trillion in local government allocations during the first quarter of 2026, directly violating a landmark Supreme Court ruling that mandated full financial autonomy for the country’s 774 local government councils. The funds, drawn from the Federation Account, were meant to be disbursed directly to local government administrations to finance grassroots development, but were instead diverted by state governors, according to verified data from the Federation Account Allocation Committee (FAAC).
The revelation has reignited a fierce national debate over the implementation of the Supreme Court’s July 2024 judgment, which declared it unconstitutional for state governments to withhold or control funds belonging to local governments. The ruling was widely celebrated as a victory for decentralised governance and grassroots accountability, but its enforcement remains elusive.
Supreme Court Ruling: A Landmark Judgment Under Siege
The Supreme Court, in its unanimous judgment delivered on July 11, 2024, held that state governments had no legal authority to retain or manage funds allocated to local government councils from the Federation Account. The court ordered that such funds be paid directly to local governments, effectively dismantling the decades-old practice of state-controlled joint local government accounts.
Justice Emmanuel Agim, who read the lead judgment, declared that “the local government system is a third tier of government and must be allowed to function independently.” The ruling affirmed that state governments could no longer appoint caretaker committees or dissolve democratically elected local government councils.
Despite this clear judicial directive, the Q1 2026 FAAC data, obtained by Sele Media Africa from official disbursement records, shows that state governments retained N1.46 trillion that should have been transferred directly to local councils. The withheld funds represent approximately 62 percent of the total N2.36 trillion allocated to local governments during the period.
How States Circumvented the Ruling
Investigations by multiple media organisations, including Premium Times, The Cable, and The Guardian Nigeria, reveal that state governments have employed several tactics to maintain control over local government finances. These include:
- Maintaining Joint Accounts: Despite the Supreme Court ruling, many states continue to operate joint local government accounts with commercial banks, where funds are deposited before being allegedly disbursed to councils. In practice, governors retain significant control over these accounts.
- Imposing Deductions: Some states have introduced “administrative charges” or “development levies” that are deducted from local government allocations before funds reach council accounts. These deductions are not authorised by law.
- Appointing Caretaker Committees: Several states have refused to conduct local government elections, instead appointing caretaker committees loyal to the governor. These committees lack democratic legitimacy and are often used as conduits for fund diversion.
- Withholding Statutory Allocations: In some states, local government councils have reported receiving only a fraction of their statutory allocations, with the remainder retained by the state government.
State Governments Defend Their Actions
Governors have defended their actions, arguing that local government councils lack the capacity to manage funds independently. The Nigeria Governors’ Forum (NGF), through its chairman and Kwara State Governor, AbdulRahman AbdulRazaq, has repeatedly called for a phased implementation of the Supreme Court ruling, citing concerns over financial mismanagement and corruption at the local level.
“We are not opposed to local government autonomy in principle,” AbdulRazaq said during a press conference in Abuja on February 15, 2026. “But we must ensure that local councils have the necessary financial controls and accountability mechanisms in place before funds are released unconditionally.”
Other governors have pointed to the lack of democratically elected councils in many states as a justification for retaining control. “How can we release funds to unelected caretaker committees that are not accountable to the people?” asked a senior official from one northern state, who spoke on condition of anonymity.
Civil Society and Opposition Condemn Diversion
Civil society organisations and opposition parties have condemned the continued diversion of local government funds, accusing governors of undermining the rule of law and sabotaging grassroots development.
The Socio-Economic Rights and Accountability Project (SERAP) has threatened to initiate contempt proceedings against state governors who fail to comply with the Supreme Court ruling. In a statement issued on April 20, 2026, SERAP’s Deputy Director, Kolawole Oluwadare, said: “The Supreme Court judgment is not a suggestion. It is a binding order of the highest court in the land. Any governor who continues to withhold local government funds is in contempt of court and must face the consequences.”
The African Action Congress (AAC) and the Peoples Democratic Party (PDP) have also criticised the ruling All Progressives Congress (APC) governors, accusing them of hypocrisy. “The same governors who preach fiscal federalism are the ones strangling local governments,” said PDP National Publicity Secretary, Debo Ologunagba.
Legal and Institutional Implications
Legal experts have warned that the continued violation of the Supreme Court ruling could trigger a constitutional crisis. Professor Yemi Akinseye-George, a constitutional lawyer and President of the Centre for Socio-Legal Studies, told Sele Media Africa that the situation “undermines the authority of the judiciary and threatens the entire federal structure.”
“If state governments can ignore a Supreme Court ruling on local government autonomy, what stops them from ignoring rulings on other matters?” Akinseye-George asked. “This is a dangerous precedent that must be addressed urgently.”
The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), has acknowledged the enforcement challenge but has not announced any specific measures to compel compliance. In a March 2026 interview with Channels Television, Fagbemi said the federal government was “exploring all legal avenues” to ensure implementation, but critics argue that more decisive action is needed.
Pan-African and Global Significance
Nigeria’s struggle with local government autonomy reflects a broader challenge across Africa, where central and state governments often resist fiscal decentralisation despite constitutional provisions. In Kenya, county governments have faced similar battles with the national government over revenue allocation, while in South Africa, municipalities have struggled with financial mismanagement and political interference.
The situation in Nigeria is being closely watched by international development partners, including the World Bank and the African Development Bank, which have tied governance reforms to funding and technical assistance. The World Bank’s Nigeria Country Director, Shubham Chaudhuri, has previously stated that “fiscal transparency and accountability at all levels of government are essential for sustainable development.”
The African Union’s African Peer Review Mechanism (APRM) has also highlighted local government autonomy as a key indicator of democratic governance. Nigeria’s failure to implement the Supreme Court ruling could affect its standing in continental governance assessments.
What Happens Next
The immediate future of local government autonomy in Nigeria remains uncertain. The National Assembly has yet to pass legislation that would provide a clear legal framework for enforcing the Supreme Court ruling, despite repeated calls from civil society. The House of Representatives Committee on Local Government has promised to hold public hearings, but no date has been set.
Meanwhile, local government councils across the country continue to operate with minimal resources, unable to deliver basic services such as primary healthcare, rural roads, and waste management. In many communities, roads remain unpaved, primary health centres lack essential medicines, and schools operate without basic infrastructure.
The NGF has proposed a gradual transition plan that would see local governments receive full autonomy by 2027, but critics argue that this timeline is too long and that governors are deliberately stalling.
“Every day that passes without implementation is a day that grassroots development is sacrificed on the altar of political convenience,” said Oluwadare of SERAP. “The people of Nigeria cannot wait until 2027 for justice.”
The Supreme Court has not issued any additional orders regarding enforcement, but legal analysts expect that contempt proceedings could be initiated by civil society groups or affected local governments in the coming months. The outcome of such proceedings could determine whether the rule of law prevails or whether state governors continue to operate above the law.
Sources
- Premium Times: “States Retain N1.46tn LG Funds Despite Supreme Court Ruling” (May 3, 2026)
- The Cable: “FAAC Data Shows States Withheld N1.46tn from Local Governments in Q1 2026” (May 4, 2026)
- The Guardian Nigeria: “Local Government Autonomy: States Defy Supreme Court, Retain N1.46tn” (May 4, 2026)
- Channels Television: “Attorney General Fagbemi on LG Autonomy Enforcement” (March 12, 2026)
- Nigeria Governors’ Forum Press Conference (February 15, 2026)
- SERAP Statement on Contempt Proceedings (April 20, 2026)
- Federation Account Allocation Committee (FAAC) Q1 2026 Disbursement Records.
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