FG Activates Direct Fund Disbursement to LGAs, Ends Governors’ Grip on Local Government Finances
FG Activates Direct Fund Disbursement to LGAs, Ends Governors’ Grip on Local Government Finances
By Matthew Eloyi
The federal government has established a dedicated unit within the Office of the Accountant General of the Federation (OAGF) to facilitate the direct disbursement of funds to all 774 local government areas (LGAs) in Nigeria, as the planned financial autonomy for the third tier of government takes effect this month.
The inaugural meeting of the Federation Account Allocation Committee (FAAC) for 2025 is slated for Wednesday, with discussions expected to focus on the operational details of this new disbursement model.
Sources at the OAGF confirmed that all structures and processes required for smooth implementation are in place. “Most of the 774 LGAs will fully start receiving their allocations from January 2025,” a source disclosed.
The source further revealed that the Inter-Ministerial Committee tasked with enforcing the Supreme Court judgment on direct revenue allocation to councils will reconvene later this month. “Our committee will review progress and finalise measures before the Accountant-General of the Federation (AGF) authorises the complete rollout,” the source said.
The Finance Minister and Coordinating Minister of the Economy, Wale Edun, has already approved the direct allocation system, ensuring there will be no challenges with the disbursement process. “There won’t be a challenge because it’s something they [ministry officials] do day in, day out for the states. A whole department is in charge of it, so it’s not going to be a challenge. The structure has been on the ground. I can confirm that,” the source emphasised.
It was also revealed that the Inter-Ministerial Committee is set to tackle attempts by some governors to undermine the autonomy of democratically elected LGA officials, including chairmen, deputies, and councillors.
With this move, the federal government aims to ensure that local governments receive their funds directly, thereby strengthening grassroots governance and curbing undue interference by state executives.
