Direct Fund Transfer to Local Governments Fails; FG Allocates January Funds to States

Local governments are anticipated to get N361.754 billion of the N860.252 billion that the federal government, through the Federation Account Allocation Committee (FAAC), has given to state governments for January.

Due to their failure to provide account details by the deadline, the councils will not be directly given their allocations.

An FAAC official stated that the Universal Basic Education Commission (UBEC) and Primary Health Center (PHC) will get direct funding from the Federation Account, while the councils’ January monies will be distributed through the states.

According to the FAAC official, the councils did not fulfill the administrative procedures for the disbursement of cash, thus the commission shifted the January allocations to state governments.

“The January allocation went to their state accounts instead of the local governments,” he stated.

“They will receive their February allocations if they have begun submitting their accounts.

“The state accounts have already received payment for the January allocation. This indicates that they failed to submit their information on time.

“The councils will receive their funding immediately starting next month if they can act quickly and take care of any outstanding issues beforehand.

“That will mark the beginning of their autonomy, as the Bola Tinubu administration has desired.”

I discovered that while the account creation process is the main obstacle, the federal government is committed to ensuring that local government autonomy is realized. Another FAAC official stated, “I can guarantee you that things are going in the right direction.”

The change follows the Supreme Court’s July 2024 decision to provide local government councils financial autonomy, holding that they should receive their Federation Account payments directly from the court instead of via state governments.

In order to carry out the ruling, the Federal Government instructed all local governments to register special bank accounts with the Central Bank of Nigeria (CBN) so that their monthly allotments could be sent directly.

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However, it is acknowledged that the continuing budget defense and other urgent engagements involving important government leaders have slowed down the process.