ABUJA, Nigeria (VOICE OF NAIJA)-State governments received N1.46tn allocated to local government councils in the first quarter of 2026, despite the Supreme Court ruling granting financial autonomy to the third tier of government.
Data from the Federation Account Allocation Committee reports, the Office of the Accountant-General of the Federation, and the National Bureau of Statistics showed that local government councils were allocated N1.46tn from revenues generated in January, February, and March 2026, but disbursed in February, March, and April, respectively.
The amount represents a 19.05 per cent increase compared to the N1.23tn received by councils during the same period in 2025.
However, the allocations were still processed through the FAAC distribution system amid delays in fully implementing the July 11, 2024, Supreme Court judgment, which directed that funds be paid directly to democratically elected local government councils.
The apex court had ruled that state governments lack the constitutional authority to retain, manage, or control funds belonging to local government councils.
Nearly two years after the ruling, direct payments to the 774 local government areas have yet to be implemented, with state governments continuing to play a central role in managing council finances.
According to FAAC figures, councils received N537.88bn from January 2026 revenue shared in February.
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This exceeds the N431.48bn received from January 2025 revenue shared in February 2025, marking an increase of N106.40bn or 24.66 per cent.
For February 2026 revenue shared in March, councils received N456.47bn, compared to N410.56bn in the corresponding period of 2025, reflecting an increase of N45.91bn or 11.18 per cent.
In April, when revenue from March 2026 was shared, councils received N468.83bn, which is N81.83bn or 21.14 per cent higher than the N387bn received in April 2025.
On a month-to-month basis, allocations declined from N537.88bn in February to N456.47bn in March, a drop of N81.41bn or 15.14 per cent, before rising slightly to N468.83bn in April, an increase of N12.36bn or 2.71 per cent.
This trend shows that although allocations increased year-on-year, monthly disbursements remained unstable, reflecting fluctuations in federation revenues, particularly from statutory sources and Value Added Tax.
Across the three months, total distributable revenue to the three tiers of government stood at N6.97tn in 2026, compared to N7.40tn in the same period of 2025, indicating a decline of N427.19bn or 5.77 per cent.
Despite the overall drop, the Federal Government, states, and local governments received higher direct allocations than in the previous year, while derivation payments to oil-producing states declined.
The Federal Government received N2.04tn in Q1 2026, up from N1.65tn in the same period of 2025, representing an increase of N391.21bn or 23.70 per cent.
State governments received N2.10tn, compared to N1.69tn in 2025, marking a rise of N416.79bn or 24.72 per cent.
Oil-producing states received N321.90bn as 13 per cent derivation in Q1 2026, down from N393.93bn in 2025, a decline of N72.03bn or 18.29 per cent.
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The figures show that local governments accounted for about 20.99 per cent of the N6.97tn distributed in the first quarter of 2026.
Analysts have consistently argued that increased allocations may have limited impact unless the Supreme Court judgment is fully implemented and councils gain full control over their funds.
Under the previous system, allocations meant for local governments were paid into State Joint Local Government Accounts, a practice critics say allowed state governments to control funds meant for grassroots development.
The Supreme Court ruling was expected to end this arrangement by mandating direct payments to councils, but delays in implementation have raised concerns that states may still retain effective control over the funds.
This issue is significant because local governments are responsible for essential services such as primary healthcare, rural roads, markets, sanitation, motor parks, and community infrastructure.
Limited financial control has often been linked to poor service delivery at the grassroots level.
The first-quarter data suggests that although more funds are reaching local governments, the issue of financial autonomy remains unresolved.
The Citizens Centre for Integrated Development and Social Rights, a non-profit organisation, recently called for greater accountability in implementing financial autonomy for local government areas.
The Executive Director of the Centre, Dr Emeka Ononamadu, made the call after a stakeholders’ meeting on the Freedom of Information Act and local governance in Nigeria, organised in collaboration with the Nigeria Civil Society Situation Room in Owerri.
Ononamadu said granting full autonomy and improving accountability at the local government level would help reduce corruption, strengthen local economies, and improve security.