On Tuesday, the Senate urged the Federal Government to integrate local government councils from all 36 states and the Federal Capital Territory (FCT) into the Federation Account Allocation Committee (FAAC) to ensure their interests are considered in the allocation of funds among the three tiers of government.
The Senate contended that this inclusion would align the distribution of allocations with a Supreme Court ruling mandating the direct release of funds to local governments, rather than routing them through state governments.
In a resolution passed in Abuja, the Senate called on the government to designate one local government council per state and the FCT to represent their interests at the FAAC.
This resolution was prompted by a motion introduced by the Deputy President of the Senate, Sen. Barau Jibrin, titled “Urgent Need to Alter the Composition of the Federation Account Allocations Committee (FAAC) by Including Representatives of Local Governments and Area Councils.”
Sen. Jibrin emphasized that, following the Supreme Court’s ruling delivered in July 2024, funds should now be allocated directly to local governments.
He highlighted that this ruling fundamentally transformed existing frameworks, such as the previous practice of channeling local government funds through state joint accounts, advocating instead for local council representation in FAAC.
The motion articulated that, “The Senate acknowledges that Local Government Councils (LGCs), established under Section 7(1) of the CFRN 1999 as a third tier of governance, are entitled to directly share in Federation Account Allocations as specified in Section 162(3) of the CFRN 1999;
“It also recognizes that the Supreme Court has interpreted Sections 162(5) and (6) of the CFRN 1999 to mean that states act merely as agents of the Federation to collect allocations intended for local governments from the Federation Account and transfer these funds to LGCs, without any rights or interests in those allocations;
“The Supreme Court further clarified that the responsibility of states is limited to conveying allocations to the LGCs from the Federation Account;
“There is awareness that the Supreme Court has confirmed that direct payments to LGCs will fulfill the constitutional intent and facilitate a more effective system for disbursing their allocations from the Federation Account;
“The Court has also asserted that the current practice of routing local government allocations through the states has proven ineffective, thus necessitating that LGC allocations be paid directly to them moving forward;
“It is observed that Section 5 of the Allocation of Revenue (Federation Account, etc.) Act 1981 outlines that the FAAC’s membership comprises only representatives from the Federal and State Governments, excluding the third tier of government, namely Local Government Councils;
“Furthermore, this provision is now inconsistent with the recent interpretations of Sections 162(5) and (6) of the CFRN 1999 as determined by the Supreme Court’s July 2024 ruling;
“It is crucial to promptly reconcile Section 5 of the Act with the Constitution and its current judicial interpretation;
“While historically, representatives of the states have acted on behalf of LGCs at FAAC, the necessity of appointing a representative from each Local Government Council and Area Council has become evident in light of the Supreme Court’s recent interpretation of the Constitution.”
The Senate has instructed that this resolution be conveyed to the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who also serves as the Chairman of FAAC, for appropriate action.
