The Central Bank of Nigeria (CBN) has initiated the process of profiling chairmen and signatories to the bank accounts of the 774 local government areas (LGAs) across the country.
This move is part of the ongoing efforts to implement local government autonomy, ensuring greater financial accountability at the grassroots level.
The Director of Legal Services at CBN Kofo Salam-Alada, highlighted the necessity of the profiling process to uphold transparency. He clarified that the procedure, akin to Know Your Customer (KYC) standards, is crucial to maintain financial integrity within local governments.
However, the Association of Local Governments of Nigeria (ALGON) has expressed concern, claiming it has not received any formal communication from the CBN about the bank account openings.
Salam-Alada spoke at a state-of-the-nation discourse organized by the Nigerian Bar Association in Abuja on Wednesday, where he emphasized the importance of establishing operational accounts for the LGAs. He urged local government chairmen to cooperate with the CBN to ensure the smooth running of the process. He also assured that once the required documentation is completed, the accounts would be operational within 48 hours.
The legal director explained that the delay in disbursing local government funds is due to the absence of a direct banking relationship between the CBN and the LGAs. Despite the Supreme Court ruling in July 2024 that affirmed the financial autonomy of local governments and directed direct transfers to their accounts, the process has been stalled for several months.
In a bid to expedite the implementation of local government autonomy, Salam-Alada assured that CBN is working closely with the Accountant-General of the Federation (AGF) and has also communicated with the LGAs.
ALGON’s representative, Sam Akala, disputed the CBN’s claim, expressing that the association had not officially received any communication regarding the bank account process. He reiterated ALGON’s readiness to fulfill its role in advancing local governance.
Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, represented by Tijjani Gazali, spoke on the ongoing efforts to complete the framework for the implementation of local government autonomy. He reaffirmed President Bola Tinubu’s administration’s commitment to fully granting financial independence to local governments.
Fagbemi condemned the continued removal of democratically elected local government councils by some state governors, a practice that he described as unconstitutional. He warned that these actions, in defiance of the Supreme Court’s ruling, could lead to severe consequences for the states involved.
The AGF also underscored the historical significance of local governments in Nigeria, noting that they have the potential to foster sustainable development and inclusive governance at the grassroots level.
Meanwhile, Mazi Afam Osigwe, President of the Nigerian Bar Association (NBA), stressed the importance of full local government autonomy. He warned that without robust governance at the local level, the country may face broader national challenges.
In response to the delayed implementation of the Supreme Court ruling, Hakeem Ambali, President of the National Union of Local Government Employees (NULGE), criticized the continued disregard for the rule of law. Ambali expressed disappointment over the ongoing opposition to the judgment, despite its importance for the financial independence of local governments.
On another front, the Chairman of the Economic and Financial Crimes Commission (EFCC), Ola Olukoyede, issued a warning to local government chairmen, urging them to exercise prudence in managing their resources. Olukoyede emphasized that local government chairmen are not immune from investigation or prosecution for corruption, and the EFCC would not wait until the end of their tenures to take action.
He also highlighted the poverty and stagnation in rural areas, despite the significant resources allocated to them. Olukoyede proposed that local government chairmen establish compliance units to oversee the proper use of funds and ensure accountability in project implementation.
The EFCC has established a Fraud Risk Assessment and Control Department to monitor local government funds and will be conducting regular visits to ensure the responsible management of financial resources.
In closing, Olukoyede assured local government officials that the EFCC would be monitoring their activities closely, even visiting councils unexpectedly to ensure that funds are being used properly. He emphasized that the commission would take action if any signs of mismanagement were detected.
