…Urges AGF to Uphold Constitutional Intent 

The Board of Trustees (BOT) of the Association of Local Governments of Nigeria (ALGON) has opposed the recommendation that revenue allocation accounts for Nigeria’s 774 Local Government Areas (LGAs) be domiciled with the Central Bank of Nigeria (CBN).  

In a letter signed by its Secretary General, Mohammed I. Abubakar on Thursday, the ALGON BOT called on the Attorney General of the Federation (AGF) to intervene and uphold the intention of Section 162(5)(6)(7)(8) of the 1999 Constitution, as amended, by ensuring that 

Local Government revenue accounts remain under commercial banks rather than the CBN.  

The BOT warned that allowing the CBN to control these funds would create unnecessary bureaucratic obstacles and expose Local Government allocations to fraudulent garnishee orders by individuals and groups claiming to be creditors of ALGON and Local Governments.  

The letter, titled “Application/Plea to Uphold the Intention of the Draftsman in Section 162(5)(6)(7)(8) of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended),” was written in response to ongoing deliberations by a sub-committee of the Secretary to the Government of the Federation’s (SGF) Inter-Ministerial Committee, which is reportedly considering recommending the use of CBN for Local Government accounts.  

The BOT accused the CBN of consistently creating obstacles that disrupt the smooth operation of Local Government funds, particularly through encumbrances placed on money belonging to Local Governments.

 It noted that the CBN has previously denied maintaining accounts for Local Governments, yet is now being positioned as the sole custodian of their funds.  

“Should these accounts be forcibly opened with the CBN, it would create an avenue for individuals and groups who claim to be creditors of ALGON and Local Governments to freely exploit and siphon these funds through fraudulent garnishee orders.”it warned.  

In light of these concerns, ALGON BOT called on the Attorney General of the Federation to investigate and take decisive action against fraudulent garnishee orders, financial mismanagement, and unconstitutional actions within ALGON.  

Additionally, they also urged the Accountant General of the Federation to disregard what it described as erroneous claims and misrepresentations to manipulate financial policies that could undermine Local Government autonomy.  

To safeguard Local Government finances and autonomy, ALGON BOT demanded that the Attorney General of the Federation issue a directive ensuring that Local Government revenue allocation accounts remain with commercial banks rather than the CBN. It also stressed the need to make the consent of the Attorney General of the Federation a necessary condition before any money standing to the credit of Local Governments in these accounts can be attached.  

While reaffirming its commitment to protecting the financial independence of Local Governments, urging all stakeholders, including Local Government Chairmen, financial institutions, and regulatory bodies, to reject any directive that seeks to compromise Local Government funds, the BOT, emphasized that only transparent financial practices, free from fraudulent interference, can guarantee the financial autonomy granted to Local Governments by the Supreme Court in its July 11, 2024, ruling.  

In light of these concerns, the BOT emphasised the need for a stakeholders’ meeting, asserting that due consultation was not conducted before the decision was implemented and there is a need for inclusive dialogue to ensure that any action affecting local government administration aligns with constitutional provisions and serves the best interests of grassroots governance.