By Akogun ‘Ṣẹ́gun ÒBÉ
The debate surrounding Local Government financial autonomy in Nigeria is not new. However, much of the current conversation appears to overlook the historical circumstances that shaped Local Government financing, the constitutional provisions governing the system, and the practical realities of administering Local Governments in Nigeria.
Having served as a Secretary to a Local Government between 1999 and 2002, at the dawn of Nigeria’s Fourth Republic following the return to democratic governance in 1999, I believe it is important to contribute to this debate from the perspective of personal experience and firsthand knowledge of the Local Government financial system.
My position is simple: Nigeria does not necessarily need another constitutional amendment to achieve Local Government financial autonomy. What is required is the faithful implementation of the existing constitutional provisions and an end to the unlawful interference of State Governments in Local Government finances.
To appreciate this position, we must first understand where the problem began.
1. The era of zero allocation: When local governments received nothing
When we assumed office in 1999, many Local Government Councils, particularly those in major towns with large numbers of public primary schools, were practically receiving zero allocation from the Federation Account.
What did zero allocation mean in practical terms? It meant that after statutory deductions were made at source, the Local Government had absolutely nothing left from its monthly Federation Account allocation.
Let me illustrate this with the financial experience of my Local Government at the time.
On paper, our Local Government was entitled to approximately ₦64 million monthly from the Federation Account. However, the deduction for primary education was also approximately ₦64 million. This deduction was made at source and paid directly to the State Universal Basic Education Board (SUBEB) to meet the salaries of primary school teachers.
Consequently, despite an apparent monthly allocation of ₦64 million, the net allocation available to the Local Government was ZERO NAIRA.
Compare this with some Local Governments in smaller towns and rural communities. A Local Government might receive an allocation of approximately ₦48 million, while its deduction for primary education could be as low as ₦7 million. This left the Council with approximately ₦41 million to manage its affairs and execute developmental projects.
This was the financial reality of Local Government administration at the time.
It is therefore important to understand that Local Governments did not enjoy equal financial circumstances. The number of primary schools and the corresponding teachers’ salary obligations significantly affected the amount of money available to individual Councils.
This historical experience is essential to understanding why the Joint Allocation Account became a necessary instrument for managing Local Government finances.
2. The joint allocation account: What the constitution actually provides
The 1999 Constitution of the Federal Republic of Nigeria provides for the establishment of a State Joint Local Government Account.
Under Section 162(6) and (7) of the Constitution, allocations to Local Government Councils from the Federation Account, together with applicable State contributions, are paid into the Joint Account and distributed to the Councils in accordance with the terms prescribed by the State House of Assembly.
The arrangement was not intended to deprive Local Governments of their resources. Rather, it provided a constitutional framework for managing and distributing Local Government funds.
There is also an important administrative and developmental consideration that must not be ignored: the creation of additional administrative structures at the grassroots.
State Governments have the authority to create Local Council Development Areas (LCDAs) to bring governance closer to the people. However, such LCDAs are not among the 774 constitutionally recognised Local Government Areas that receive direct statutory allocations from the Federation Account.
This creates a funding challenge.
If State Governments create additional administrative structures to improve grassroots governance, how are those structures expected to be funded when they do not receive direct allocations from the Federation Account?
The Joint Allocation Account provides a framework through which the financial relationship between constitutionally recognised Local Governments and the wider grassroots administrative structure can be managed.
This is one of the important practical considerations in the debate over whether the Joint Allocation Account should be abolished.
3. The Oyo state experience: The struggle to establish the joint allocation system
My experience in Oyo State provides an important illustration of how the Joint Allocation Account can work when properly administered.
During the administration of the late Governor Lam Adesina (1999–2023), considerable pressure and engagement were required to secure the passage of the necessary Joint Allocation legislation by the Oyo State House of Assembly.
Interestingly, many legislators representing Local Governments that enjoyed relatively high net allocations opposed the proposed arrangement. Their opposition was understandable from the perspective of the financial advantages their respective Local Governments enjoyed under the existing distribution pattern.
However, we believed that the system needed to be fairer and more balanced.
We therefore mounted sustained pressure on the Governor to support the initiative. Eventually, Governor Lam Adesina was able to persuade the legislative arm to pass the necessary bill into law in 2002, towards the end of our tenure.
That development was significant because it established a framework for a more coordinated and transparent distribution of Local Government resources across the 33 Local Government Areas of Oyo State.
4. How the joint allocation account worked without governors’ interference
One of the most important lessons from our experience in Oyo State was that the Joint Allocation Account could function effectively without direct interference from the State Governor.
Under the arrangement, monthly Joint Allocation Account meetings were held, with representatives of all 33 Local Government Councils in attendance. The Commissioner for Local Government Affairs led the State Government delegation.
At these meetings, all legitimate joint obligations and deductions, including the financial obligations relating to primary school teachers’ salaries, were accounted for.
After these deductions, the remaining funds were distributed among the Local Governments using the applicable indices and principles employed in sharing Federation Account allocations.
What was particularly important was that the Governor did not interfere in the distribution process.
There was an established procedure. There were representatives of the Local Governments. There was a forum for financial engagement, and the distribution followed agreed criteria.
That was the beauty of the Joint Allocation Account: it provided a framework for collective financial administration without necessarily compromising the financial interests of individual Local Governments.
This experience reinforces my conviction that the problem is not necessarily the existence of the Joint Allocation Account. The problem arises when those entrusted with administering it abandon the constitutional framework and use it as an instrument of political or financial control.
5. Funding the LCDAs: Why abolishing the joint account may not be the solution
Those advocating the outright abolition of the Joint Allocation Account must also address an important question:
If the Joint Allocation Account is abolished, what happens to the funding of Local Council Development Areas?
The 774 constitutionally recognised Local Government Areas receive allocations from the Federation Account. The LCDAs created by State Governments do not enjoy the same constitutional status or direct allocation entitlement.
These additional administrative structures require resources to function. They have personnel, administrative responsibilities and grassroots development expectations.
If the State Government completely withdraws from the financial arrangement without establishing a sustainable alternative, how will these structures be funded?
The answer cannot simply be to abolish the Joint Allocation Account without considering the wider financial and administrative implications.
What Nigeria needs is a transparent, accountable and constitutionally compliant system in which the statutory entitlements of Local Governments are protected, legitimate obligations are properly accounted for, and the funding of additional administrative structures is clearly defined.
The objective should be to strengthen grassroots governance, not weaken it through poorly considered financial reforms.
6. Local government financial autonomy: The real issue is implementation
There is a distinction between the constitutional existence of financial autonomy and the practical enjoyment of that autonomy.
The 1999 Constitution already provides a framework for Local Government financing. Section 162 establishes the State Joint Local Government Account and provides for the distribution of funds to Local Government Councils.
The problem, in my view, is not simply the absence of constitutional provisions. It is the manner in which these provisions have been implemented, or deliberately frustrated, by successive administrations.
A Joint Allocation Account should not become a platform through which State Governors exercise arbitrary control over Local Government finances.
Neither should it be used to divert, withhold or misappropriate funds legally due to Local Government Councils.
The constitutional arrangement must be respected. The State Government’s role should be exercised within the boundaries established by law, while the financial entitlements of Local Governments must be protected.
Financial autonomy must mean that Local Governments can access and utilise their legally allocated resources in accordance with their statutory responsibilities, approved budgets and applicable financial regulations.
It must also mean accountability. Autonomy does not translate into freedom from financial scrutiny, auditing or compliance with public financial management rules.
7. My position: We need constitutional compliance, not political manipulation
Having participated in Local Government administration during the formative years of the Fourth Republic, I consider it necessary to distinguish between the constitutional framework and the political practices that have undermined it.
My position is that we should not confuse the abuse of an existing constitutional arrangement with the failure of that arrangement itself.
The Joint Allocation Account can serve a useful purpose if it is administered transparently, fairly and without unlawful interference.
Scrapping it without addressing the funding implications for LCDAs and other grassroots administrative structures may create more problems than it solves.
What we need is:
1. Strict adherence to the Constitution: All provisions governing Local Government finances must be implemented faithfully.
2. An end to unlawful interference: State Governors must not use the Joint Allocation Account to exercise arbitrary control over Local Government resources.
3. Transparency in monthly allocations: All deductions, joint obligations and distributions must be clearly documented and open to scrutiny.
4. Protection of Local Government entitlements: Every Council must receive and utilise its legally due resources in accordance with the law.
5. Proper accountability: Local Government financial autonomy must go hand in hand with responsible budgeting, auditing and prudent management of public funds.
6. A sustainable funding arrangement for LCDAs: Any reform of the Joint Allocation Account must take into consideration the financial realities of additional grassroots administrative structures created by State Governments.
Conclusion: The constitution is not the problem; its abuse is
The debate about Local Government financial autonomy should go beyond political sentiments, slogans and constitutional amendments.
We must examine the historical realities, understand the existing constitutional provisions and learn from administrative experiences that have demonstrated that the system can work.
Between 1999 and 2002, I witnessed the challenges of Local Government financing firsthand. I experienced the era of zero allocation, participated in the advocacy for the Joint Allocation framework in Oyo State and witnessed a system in which monthly allocations could be discussed and distributed without direct gubernatorial interference.
That experience remains relevant to the present debate.
I therefore maintain that the solution is not necessarily to scrap the Joint Allocation Account or embark on another round of constitutional amendments.
The solution is to stop the abuse of the existing system, enforce constitutional compliance, protect Local Government resources and allow elected Local Government administrations to discharge their responsibilities without unlawful financial interference.
Local Government is the closest tier of government to the people. Its financial resources should translate into better roads, functional primary healthcare centres, improved markets, rural development, sanitation and other essential services that directly affect citizens.
True Local Government autonomy is not merely about who controls the money. It is about ensuring that resources allocated for grassroots development actually reach the grassroots and are used for the benefit of the people.
The Constitution has provided the framework. What Nigeria needs now is the political will to respect it.
*Akọgun ‘Ṣẹ́gun Òbé, JP is former Secretary to the Local Government (SLG), Ibadan North Local Government (1999 – 2002)
