Nearly two years after the Supreme Court ordered the direct payment of federal allocations to Nigeria’s 774 local government councils, implementation of the ruling has yet to be fully realised, despite councils receiving N10.48 trillion over the period, according to a report by The PUNCH.
Analysis of Federation Account Allocation Committee (FAAC) reports, using data from the National Bureau of Statistics (NBS) and the Office of the Accountant-General of the Federation, showed that local governments received N10.479 trillion between the July 2024 and June 2026 FAAC meetings.
The allocations followed the Supreme Court’s July 11, 2024 judgment in the case of Attorney-General of the Federation v. Attorney-General of Abia State and 35 Others (SC/CV/343/2024), which directed that federal allocations be paid directly into local government accounts and declared the use of unelected caretaker committees unconstitutional.
Despite the ruling, concerns remain over whether councils are receiving their allocations directly or whether many states are still operating the State Joint Local Government Account, through which governors have traditionally managed council funds.
According to the report, local government allocations rose from N4.496 trillion between July 2024 and June 2025 to N5.984 trillion between July 2025 and June 2026, representing a 33.1 per cent increase.
The average monthly allocation also increased from N374.65 billion to N498.67 billion during the two periods.
However, the increase in funding has not been matched by clear evidence of nationwide implementation of financial autonomy or significant improvements in grassroots service delivery.
The report noted that the controversy over local government funding stems from Section 162 of the 1999 Constitution, which established the State Joint Local Government Account. For years, labour unions and civil society groups have accused state governments of deducting and controlling funds meant for councils.
The National Union of Local Government Employees (NULGE) said the Federal Government has yet to begin direct payment of allocations to local councils.
NULGE President, Aliyu Kankara, said the union has repeatedly urged the Federal Government to implement the Supreme Court judgment but claimed that state governments still receive and control local government allocations.
Investigations across several states, including Kaduna, Kano, Benue, Plateau, Sokoto and Abia, indicated that many councils are still operating under the joint account system, with officials saying governors continue to approve or release funds for local government projects.
In contrast, Jigawa State said all its 27 local government councils now receive their FAAC allocations directly from the Federal Government and operate independent bank accounts.
Jigawa ALGON Chairman and Chairman of Dutse Local Government Area, Sibu Abdullahi, said the arrangement has improved transparency and strengthened service delivery at the grassroots.
The report also showed that a total of N42.709 trillion was shared among the Federal Government, state governments, local governments and oil-producing states between July 2024 and June 2026.
Of the amount, the Federal Government received N14.620 trillion, state governments got N14.506 trillion, local governments received N10.480 trillion, while oil-producing states shared N3.103 trillion as 13 per cent derivation revenue.
Despite the increase in allocations, stakeholders say full financial autonomy for local governments remains largely unimplemented across most states, raising concerns about accountability and the delivery of services at the grassroots.
