FG reveals why CBN hasn’t released funds to 774 LGAs

The Federal Government has explained why the Central Bank of Nigeria (CBN) has not yet started releasing funds directly to the 774 Local Government Areas (LGAs), despite a Supreme Court ruling.

Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, and CBN’s Director of Legal, Kofo Salam-Alade, stated that proper procedures are not yet in place to enable direct funding.

They said efforts are ongoing to finalize the necessary framework and profile those who will manage the accounts.

Speaking at a forum organized by the Nigerian Bar Association (NBA) on local government autonomy, the Attorney-General said a committee was formed after the Supreme Court’s ruling on July 11, 2024.

This committee includes representatives from the Federal Government, the Association of Local Governments of Nigeria (ALGON), and the Nigerian Governors Forum (NGF).

Their task is to develop a working system for direct allocation payments.

The Attorney-General added that President Bola Tinubu’s administration took the 36 state governors to court to strengthen local government autonomy.

However, he noted that some state governments are still illegally dissolving elected local councils, despite the Supreme Court’s judgment. He warned that such actions could have serious consequences.

CBN’s Legal Director, Salam-Alade, explained that the bank has no direct banking relationship with local governments.

He said they are working on verifying individuals who will be signatories to the accounts.

He urged local government representatives to complete their documentation, assuring that the process would be swift once all requirements are met.

However, ALGON representative Sam Akala claimed he was unaware of any official communication from the CBN about opening these accounts.

Despite this, he expressed ALGON’s commitment to ensuring development reaches the grassroots.

NBA President Mazi Afam Osigwe, who spoke at the event, stressed the need for democratic governance at the local level. He said if local governments are not properly managed, it could lead to more serious national problems.