Two years after Supreme Court ruling, local government funds still trapped between the well and the bucket

A judgment without teeth
Two years after Nigeria's Supreme Court ordered that federal allocations be paid directly into local government accounts, the implementation of that landmark ruling remains stalled, even as more than N10.48 trillion has flowed into the third tier of government during the period, according to findings by The PUNCH. It is a Hausa saying that captures the situation best: the well gives water, but the bucket refuses to draw it up. The resource is there. The mechanism to deliver it to the people who need it is not.

What the court ordered
On July 11, 2024, the Supreme Court ruled in a suit brought by Attorney-General of the Federation Lateef Fagbemi on behalf of the federal government, seeking full financial autonomy for all 774 local government councils. In a judgment delivered by Justice Emmanuel Agim, the apex court held that state governments' continued retention and control of local government funds was unconstitutional, and that the federation could pay allocations directly to councils or route them through the states, provided the funds actually reached local administrations rather than being absorbed into state treasuries.

The money moved, the autonomy did not
An analysis of Federation Account Allocation Committee reports, cross-checked against data from the National Bureau of Statistics and the Office of the Accountant-General of the Federation, found that local government councils received N10.479 trillion between the July 2024 and June 2026 FAAC meetings, equivalent to 24.54 percent of total allocations distributed across all tiers of government. The federal government's own share rose sharply over the same window, climbing from N5.911 trillion in the first year under review to N8.709 trillion in the second, an increase of 47.34 percent, while state allocations, excluding oil-derivation payments, grew from N6.169 trillion to N8.337 trillion.

Despite that scale of resourcing, the National Union of Local Government Employees says direct payments from the federal government to council accounts have simply not commenced. Speaking to Sunday PUNCH, NULGE National Secretary Isah Gambo said the union was not aware of any local government in the country that had begun receiving its statutory allocation directly from the Federation Account, notwithstanding the presidential directive to implement the ruling.

Why the order has stalled
Multiple threads explain the gap between judgment and practice. The Central Bank of Nigeria reportedly required all 774 councils to produce at least two years of audited financial reports before direct disbursement could begin, a bureaucratic threshold many councils have struggled to clear. A ten-member inter-ministerial committee, chaired by Secretary to the Government of the Federation George Akume, was set up in August 2024 specifically to implement the ruling and had, by October of that year, concluded its assignment, though its recommendations have not translated into functioning direct payments nearly two years on.

Findings also point to more deliberate resistance. Some state governors have reportedly devised arrangements with elected local government chairmen to continue routing council funds through state-controlled accounts even after direct allocation formally begins, with chairmen in some states allegedly required to pledge continued remittance to the state as a condition of their party's backing before elections.

Under one such arrangement described to Sunday PUNCH, chairmen would retain only a fraction of their allocation for local running costs and security votes after paying salaries, sending the remainder back to the state, effectively reproducing the dependency the Supreme Court ruling was meant to end.

Political timing has compounded the delay. Presidency and ruling-party sources have suggested that President Bola Tinubu has been reluctant to force full implementation ahead of the 2027 general elections, wary of confronting state governors whose political machinery he will need for his re-election campaign, despite having threatened months earlier to issue an executive order compelling direct payment.

A test of institutional seriousness
A year after the ruling, checks found that state governors had retained control of council allocations totalling N4.5 trillion in direct defiance of the judgment. That the figure has since grown alongside total allocations, rather than shrinking as compliance improved, suggests the problem is not technical capacity but political will. As one Nigerian editorial put it plainly this week, the judgment barred state governments from withholding or spending funds meant for councils and declared unelected caretaker committees unconstitutional, yet almost two years later the old order largely remains intact.

For Nigeria's 774 local government councils, closest to citizens in matters of primary healthcare, basic education infrastructure and rural roads, the consequence of this stalemate is not abstract. It is the continued absence of the very fiscal autonomy the Supreme Court found the constitution already guaranteed them, even as the naira figures attached to their allocations climb into the trillions.

References
The PUNCH, "Autonomy battle: States defy Supreme Court, control N10tn LG allocations," https://punchng.com/autonomy-battle-states-defy-supreme-court-control-n10tn-lg-allocations/

The PUNCH, "Morning Recap: States defy S'Court on LG autonomy, Umahi demands autopsy in nurse's death, other top stories," https://punchng.com/morning-recap-states-defy-scourt-on-lg-autonomy-umahi-demands-autopsy-in-nurses-death-other-top-stories/

The PUNCH, "Autonomy: ALGON drags FG, states before court over FAAC sharing," https://punchng.com/autonomy-algon-drags-fg-states-before-court-over-faac-sharing/

The Sun Nigeria, "Two years after, FG fails to implement Supreme Court judgment," https://thesun.ng/two-years-after-fg-fails-to-implement-supreme-court-judgment-on-lg-financial-autonomy/

The PUNCH, "LG Autonomy Stalled by 2027 Politics Despite Supreme Court Ruling," https://punchng.com/2027-politics-stall-lg-autonomy-despite-supreme-court-ruling/

The PUNCH, "How govs, LG chairmen enter deals to bypass order on council funds," https://punchng.com/how-govs-lg-chairmen-enter-deals-to-bypass-order-on-council-funds/

The Africa Report, "Nigeria: Supreme Court orders payment of allocations directly to local governments," https://www.theafricareport.com/354876/nigeria-supreme-court-orders-payment-of-allocations-directly-to-local-governments/

THISDAYLIVE, "Constitutionality of Payment of Federal Allocation Directly to Local Government Councils," https://www.thisdaylive.com/2024/07/30/constitutionality-of-payment-of-federal-allocation-directly-to-local-government-councils/

P.M. News, "Editorial: Implement local government autonomy now," https://pmnewsnigeria.com/2026/07/17/editorial-implement-local-government-autonomy-now/