The Federal Government has reaffirmed its commitment to fully implementing the Supreme Court ruling on local government financial autonomy, but structural and institutional bottlenecks continue to delay direct transfers to Nigeria’s 774 local government areas (LGAs).
Speaking at the Agora Policy Conversation in Abuja on Tuesday, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, explained that the Federal Government is working on reconfiguring entrenched administrative systems before direct funding can be effectively operationalised.
Edun said the apex court’s ruling made two major pronouncements: first, that only democratically elected local governments are entitled to statutory allocations; and second, that such allocations must be paid directly to them from the Federation Account.
While the first directive has been implemented—unelected councils no longer receive allocations—direct transfers are still “a work in progress.”
“It is not as simple as flicking a switch,” Edun said. “There are legacy funding structures, such as those for primary healthcare and basic education, currently managed by states, which must be reconfigured. We need serious adjustments to the funding architecture before local governments can receive and manage allocations directly.”
The minister emphasised that local governments are critical to President Bola Tinubu’s Renewed Hope Agenda, stressing that empowering councils is key to grassroots development.
“To lift millions out of poverty, we must start from the grassroots. Local governments must be engines of development,” Edun said, noting that their financial independence is a “development necessity, not just a legal issue.”
Edun also provided updates on Tinubu’s economic reforms, describing the removal of fuel subsidy and exchange rate unification as necessary first steps. He noted that Nigeria’s economy grew by 3.4 per cent in Q1 2025, but the administration’s goal is to double that growth rate to about 7 per cent annually to create jobs and reduce poverty.
“The next phase focuses on stabilising inflation, increasing reserves, reducing fiscal deficits, and boosting revenue,” Edun said.
At the event, Fiscal Responsibility Commission Chairman Victor Muruako urged LGAs to embrace fiscal discipline and transparency when full autonomy takes effect. He warned that borrowing must comply with the Fiscal Responsibility Act to avoid debt crises.
Similarly, Agora Policy Chair, Ojobo Atuluku, called for a complete overhaul of Nigeria’s local governance system. She announced the upcoming launch of the Local Governance Accountability Portal, which will track statutory allocations to LGAs and monitor elected officials since 1999.
“Autonomy without accountability will fail. We need to dismantle political patronage systems and make councils truly responsive to citizens,” Atuluku said.
Deborah Isser, Lead Governance Specialist at the World Bank, noted that political resistance from state governors and weak accountability structures remain major obstacles to local government autonomy. She warned that poor governance at the grassroots contributes to Nigeria’s high maternal mortality, child deaths, and learning poverty.
“The Supreme Court has ruled, but implementation requires more than legal pronouncements. We need to fix how basic services, like healthcare and education, are delivered,” she said, adding that the World Bank’s HOPE Programme is supporting reforms to improve local governance.
The Agora Policy Conversation, organised in partnership with the Centre for Fiscal Transparency and Integrity Watch, TheCable, and the MacArthur Foundation, brought together senior policymakers, development partners, and civil society leaders to deliberate on strengthening local governance through fiscal autonomy.