Direct local government funding, a major restructuring agenda

The new policy aimed at funding local governments directly is out to give a new lease of life to Nigerians at the grassroots. The President Muhammadu Buhari administration has through the Nigerian Financial Intelligence Unit (NFIU) scored a significant goal by the policy. This provides that monthly statutory allocations due to local governments must be […]

The new policy aimed at funding local governments directly is out to give a new lease of life to Nigerians at the grassroots. The President Muhammadu Buhari administration has through the Nigerian Financial Intelligence Unit (NFIU) scored a significant goal by the policy. This provides that monthly statutory allocations due to local governments must be credited to their accounts directly and expended appropriately.  The action of the NFIU must be seen within the context of extant laws on local government funding as enshrined in Section 162 (6) and (8) of the 1999 constitution.

What makes this decision, which comes into effect on June 1, 2019, significant, is the fact the PMB administration commenced its restructuring of the country from the most important tier of government, the local governments. Before this landmark decision, state governments though a phony arrangement in the name of states and LGAs joint account manage the allocations on behalf of the LGAs with a chunk of it going to ‘joint projects’ while pittance goes directly to the LGAs for salaries and other overhead services. Under this arrangement, most LGAs hardly get up to 40 per cent of their statutory funding annually. With this new development, the third tier of government can now serve the purpose for which it was created; which is to provide welfare, necessities like education, water supply, health needs, feeder roads among others.

It is hoped that this recent intervention by NFIU will not be flouted.  It is a good thing that the NFIU has put in place strategic measures to secure and expend the LGAs statutory allocations in their accounts.  They have also put in place punitive measures against violators of the order. The biggest beneficiaries of the new order are the local government system, workers and the entire communities residing within the catchment areas of the LGAs.

It is hoped that the measure will go a long way in restoring full autonomy to the LGAs in the country and further restore confidence in the system by the people. The larger implication of this is that Nigeria is gradually moving to the Next Level.

 

Musa Ilallah wrote from Abuja, and can be reached at:  [email protected]