The Senate has urged the Federal Government to ensure the inclusion of one representative from each local government council across the states, and one from each area council in the Federal Capital Territory, in the deliberations of the Federation Account Allocation Committee (FAAC).
The resolution, aimed at enhancing constitutional compliance and promoting financial transparency at the grassroots level, followed a motion sponsored by Senator Barau Jibrin (Kano North). He argued that local governments, as third-tier governments recognized under Section 7(1) of the 1999 Constitution (as amended), are constitutionally entitled to a direct share from the Federation Account.
The Senate emphasized a recent Supreme Court ruling which made it clear that state governments are merely conduits in the disbursement of funds to local governments and do not possess ownership or discretionary authority over such allocations.
Currently, FAAC comprises only representatives from federal and state governments. However, lawmakers pointed out that Section 5 of the Allocation of Revenue (Federation Account, etc) Act 1981 — which excludes local governments from FAAC — is now considered inconsistent with the Constitution, following the Supreme Court’s landmark judgment in July 2024.
The Senate further stressed that continued representation of local governments by state governments at FAAC contradicts this evolving legal interpretation. They maintained that direct representation is now necessary to protect the interests of local councils and to ensure transparent and equitable distribution of national revenues.
The Senate directed that this resolution be immediately conveyed to the Minister of Finance and Coordinating Minister of the Economy, who chairs the FAAC.
What you should know
This resolution marks a significant shift in Nigeria’s revenue sharing framework, aiming to empower local governments with a direct voice in federal allocations.
If implemented, it could redefine grassroots governance and reduce the financial influence state governments hold over local councils.
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