The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun has disclosed that there are certain undisclosed impediments to direct payment to the local governments following the recent ruling by the Supreme Court.
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The apex court had ruled that federal allocations to the local councils should be directly paid to them as against the extant structure of paying into state/local government joint accounts in the 36 states of the federation.
This much was revealed yesterday in Abuja by the Minister of Finance and Coordinating Minister for the Economy, Mr Wale Edun, who proffered reasons the June allocation was paid directly to states instead of the local governments.
Briefing journalists on the development, Edun blamed the situation on the inability of the Minister of Justice and Attorney General of the Federation, Lateef Fagbemi, to get the certified true copy of the judgment as informing the decision of the Federation Account Allocation Committee (FAAC) to release June allocations to states.
He said as of last week when FAAC disbursement held, the Attorney General of the Federation was yet to receive copies of the court judgements granting financial autonomy to local governments.
Edun, who also used the engagement to declare that the economy was responding positively to the policies and reforms initiated by the current administration headed by President Bola Ahmed Tinubu, reiterated that as soon as the Supreme Court judgment gets to the AGF, the payment of allocation from the federation account would be made directly to the local governments.
He also revealed that the Federal Government exited Ways and Means by paying N7.3 trillion obligation. “Nigeria is in good position in terms of debt service to GDP from 97 per cent in 2023 to 68 per cent in 2024. The budget deficit is moving in the right direction. We are closer to a lower budget deficit than we met,” Edun disclosed.
“As far as the Supreme Court ruling on local governments, Mr. President, as a Democrat, believes in federalism, he believes in fiscal federalism, he fought for it as a state governor.
So what has come to pass now is a new regime, a new fiscal regime where through the state joint local government account funding will go directly to local governments.
“There is a committee composed by the attorney general as well as representatives of the local governments, the states, and, of course, the Federal Government within the context of the Federation Account Allocation Committee. That is the practicality of moving to what the Supreme Court has said.
“There are impediments, practical impediments to immediate implementation, such as the fact that and the governments or governors have moved immediately to hold local government elections because the funds have to go to elected governments, but it’s also in practical terms.
“There was a Federal Account Allocation Committee meeting just last week, but it could not get implemented because, in fact, the judgment, the actual proceedings, had not been handed down.
They were not in the hands of the Attorney General for him to start implementing. So what is going to happen is on the Presidency that believes in the rule of law, the Supreme Court judgment on local governments will be faithfully implemented,” he added.
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