In a unanimous decision, a seven-member panel of the apex court declared that it is unconstitutional for state governments to retain or manage funds meant for local councils.

The judgment held that the use of a caretaker committee amounts to the state government taking control of the local government and is in violation of the 1999 Constitution.

However, 18 months after the judgment, findings by The PUNCH show that the process remains largely unimplemented.

Local government allocations have continued to pass through state governments amid delays and disputes between the Central Bank, state governments, local government authorities, and other relevant agencies.

The PUNCH learnt that state governments received control over at least N7.43tn meant for local government councils between July 2024 and December 2025, despite the landmark Supreme Court ruling mandating direct financial autonomy for councils across the federation.

An analysis of Federation Account Allocation Committee disbursements, based on official press statements issued by the Office of the Accountant General of the Federation after each FAAC meeting, shows that local governments were allocated N7.43tn over the 18-month period, even as the structure for direct access to the funds remained largely unchanged.

The amount was derived from allocations to the 774 local councils from July to December 2024 and the full 12 months of 2025.

In the second half of 2024 alone, councils received N2.08tn, rising sharply to N5.35tn in 2025.

FAAC data show that in July 2024, local governments received N337.02bn as revenue earned in June.

This rose to N343.70bn in August and moderated to N306.53bn in September. Allocations rebounded in the final quarter, climbing from N329.86bn in October to N355.62bn in November, before peaking at N402.55bn in December 2024.

Despite the rising inflows, funds continued to be paid through the long-criticised State Joint Local Government Account framework, allowing governors to retain significant influence over council finances.

The trend accelerated in 2025. Local governments received N361.75bn in January, rising steadily to N434.57bn in February and N410.56bn in March.

By mid-year, monthly allocations crossed N440bn, reaching N444.85bn in July and N485.04bn in August.

The highest monthly allocation to councils during the period was recorded in October 2025, when N529.95bn was shared as revenue earned in September.

This was followed by N505.80bn in November before moderating to N445.27bn in December 2025.

In total, local governments received N5.35tn in 2025, compared with N3.77tn in 2024, representing an increase of N1.58tn or about 42 per cent year on year.

The surge mirrored broader growth in FAAC distributions. Total allocations to the three tiers of government rose from N13.91tn in 2024 to N20.28tn in 2025, while total distributable revenue, including 13 per cent derivation, climbed from N15.26tn to N21.89tn.

Federal Government allocations increased from N4.95tn in 2024 to N7.61tn in 2025, while states’ allocations rose from N5.19tn to N7.31tn over the same period.

However, the continued routing of council funds through state structures has raised concerns that the gains from higher revenues are not translating into improved grassroots governance.

ALGON, NULGE back Tinubu

In an interview with our correspondent in Abuja, the Secretary General of ALGON, Muhammed Abubakar, affirmed support for President Bola Tinubu’s move to mandate the deduction of funds meant for LGs directly from the Federation Account Allocation Committee.

Muhammed said the President had made his warning directly to the governors and anchored it on the Supreme Court judgment, which he described as the highest authority in the land.

“So basically, as you are aware, he said it in their presence, not in their absence. So, my belief is that they will actually carry that out before the president will also do the needful, like he rightly told them in the meeting,” he said.

He expressed confidence that the governors would comply with the ruling without further prompting, noting that Tinubu’s remarks were clear and left no ambiguity about the consequences of continued non-compliance.