The Supreme Court of Nigeria last week solved a puzzle regarding the finances of local government areas (LGAs) in the country, which had been a subject of controversy for a while. In a country where the Constitution approved a joint account between state and local governments, and where there were varied interpretations about the status of local governments, Nigerians were divided on who should hold and control local government allocations. Should it be state governors? Or should it be local government chairmen?
The federal government had gone to the Supreme Court to seek an order for the full autonomy of local government areas and also an approval for allocation from the federation account to be paid direct to local government coffers. The federal government’s demand arose from allegations that state governors had taken hold of allocations for local governments and decided what happened to them.
The state governors had challenged the suit, arguing that the Supreme Court had no jurisdiction to hear it and also that the Attorney-General of the Federation, Lateef Fagbemi, who instituted it on behalf of the federal government, lacked the power to so do. The governors did not present a strong argument against local government autonomy but questioned the jurisdiction of the apex court to handle the matter. When a case is fought only on technicalities rather than points of law, the legal foundation is weakened. That was the case with the governors’ challenge of the federal government’s suit.
It must be stated that the federal government’s suit on the councils’ autonomy was not the first time the Supreme Court had been approached to resolve a dispute regarding local governments. During the presidency of Chief Olusegun Obasanjo, the Supreme Court made an intervention over the creation of local government areas. Lagos State government, under the current President of Nigeria, Senator Bola Tinubu, had created new local government areas. The federal government, believing that such a move was illegal, had withheld allocations to Lagos State local governments.
Not cowed, the Lagos State government had gone to court to challenge this. The Supreme Court eventually ruled that it was illegal for the federal government to withhold allocations to Lagos State local governments. The apex court also affirmed that states had the power to create local governments. It also said that, to complete the process, the creation of such local government areas by any state government must get the endorsement of the National Assembly (Senate and House of Representatives) as well as two-thirds of all the 36 State Houses of Assembly in Nigeria. Since Lagos State did not get the approval of the National Assembly and 24 state Houses of Assembly for its then newly created local government areas, the councils so created had to be designated local development councils (LDC). This can explain why LDCs are in states where governors “created” local government areas.
Now, on who should hold allocations for local government areas, the Supreme Court, after first resolving that it had jurisdiction to hear the case and that the AGF had the locus standi to file the suit, ruled that it was unconstitutional for governors to hold local government funds. The apex court also made a consequential order that local government allocations should be directly paid to them. Also, the apex court resolved the vexed issue regarding the appointment of caretaker committee (CC) or transition committee (TC) chairmen or mayors to pilot the affairs of local government areas. It stated without equivocation that local government areas should be run by democratically elected chairmen and not appointed CC or TC chairmen or mayors. The apex court also directed that allocations should not be sent to local government areas without duly elected chairmen.
Indeed, in the Supreme Court’s judgment, Justice Emmanuel Agim, declared: “I hold that the state’s retention of the local government funds is unconstitutional.”
The justice also stated: “Demands of justice requires a progressive interpretation of the law. It is the position of this court that the federation can pay LG allocations to the LGs directly or pay them through the states.
“In this case, since paying them through states has not worked, justice of this case demands that LG allocations from the federation account should henceforth be paid directly to the LGs.”
Six other justices of the Supreme Court concurred with this lead judgment.
Ever since this judgment, individuals and organisations have been praising the justices of the Supreme Court for having the courage to liberate the local government areas from the stranglehold of state governors. While some have described the judgment as a victory for democracy, others believe that it is the best thing that has happened to Nigeria in recent times.
However, in the midst of the euphoria over the Supreme Court’s judgment, it must be stated that autonomy of local government goes beyond the apex court’s pronouncement on direct payment of allocations. There are issues that must be resolved for the local governments to be autonomous and responsibly so.
First, the 1999 Constitution of the Federal Republic of Nigeria (as amended) does not recognise local governments as the third-tier of government. People are just assuming and regarding local government areas as third-tier. There is only constitutional backing for federal and state as tiers of government. The Constitution also only talks about executive power, in Section 5(1) and (2), vested in the President and governors. No mention of executive power for local government chairmen.
For the avoidance of doubt, the Constitution, in Section 7(1) only acknowledges local governments as a “system.” It says: “The system of local government by democratically elected local government councils is under this Constitution guaranteed; and accordingly, the Government of every State shall, subject to section 8 of this Constitution, ensure their existence under a Law which provides for the establishment, structure, composition, finance and functions of such councils.”
Therefore, for the local governments to be autonomous, there must be a constitution amendment to expressly recognise them as the third tier of government, with the local government chairmen also not only given executive power but also requisite power to control their allocations. Such an amendment must also remove the conduct of local government elections from State Independent Electoral Commission (SIEC) and vests it in the Independent National Electoral Commission (INEC), while the tenure of elected local government officials must be clearly defined, with provision that council chairmen could only be removed from office through impeachment by the councillors and not by executive fait of state governors.
Irrespective of the Supreme Court’s judgment, the Constitution (as amended) made local government areas subject to state governments. The funding of local governments is dependent on state governments. The state governments have the power to create local governments and define their functions and structures. The federal government only allocates funds to local governments through the state governments. The local governments do not have the power to make their own decisions. The state governments dissolve, at will, elected local government councils and replace them with caretaker committees.
For local government autonomy to be full, the National Assembly, riding under the judgment of the Supreme Court, should initiate an isolated constitution amendment to explicitly recognise local governments as a third tier of government, with clear powers and responsibilities. The constitution amendment should also specify, just as Supreme Court has directed, direct allocation of funds from the Federation Account to local governments, without state government intermediation. It should also take care of political autonomy, which will allow local governments to elect their chairmen and councillors without state government’s interference, under the supervision of the INEC.
There is also need for administrative autonomy, whereby local governments have the power to manage their own affairs, including hiring and firing staff, without state government’s approval. There should be legislative autonomy, by empowering local governments to make their own laws and regulations, without requiring state government’s approval.
Local government areas should also be given judicial autonomy by the establishment of independent judicial bodies to handle local government disputes and matters. There should be fiscal federalism policy, which allows local governments to generate revenue and manage their finances independently. To ensure seamless operation, there should also be clear guidelines for state-local government relations, to prevent state interference in local government affairs.
Since there cannot be authority without responsibility, the Constitution should establish mechanisms for transparency, accountability and effective oversight to ensure responsible governance at the local government level. Local governments have been accused of taking bank loans in the past, for instance, without paying them. Therefore, there should be a constitutional provision that such loans can only be obtained on the guarantee of the federal government, so that, in failure to pay, the funds would be deducted from the local government allocations, while the officials would be made to face federal government agencies responsible for dealing with fraud and financial infractions, like the Economic and Financial Crimes Commission.
In granting autonomy to local governments, we should know that there are specific responsibilities therein. Primary healthcare and primary education fall under the purview of local governments. This means that local governments would build and maintain primary schools, pay salaries of teachers in primary schools, build and maintain primary healthcare centres, pay personnel in primary healthcare centres, pay other council staff, as well as construct/maintain rural roads and provide other facilities.
When state governments stop being the proverbial headmaster and cease to carry the monkey, we should hope that allocations to councils would be enough to take care of their responsibilities. This is not to say that state governments should not, ordinarily, make critical interventions in local governments, just as federal government does in states.
Nigerians have been clamoring for true federalism. Local governments autonomy is a step in that direction.