Local Government Areas in Nigeria received N4.85tn as Federal Accounts Allocation Committee allocation in three years.
This is according to FAAC documents analysed by our correspondent.
Although a breakdown for the all the timeframe under reference was not available, Alimosho, Abuja Municipal, and Ajeromi/Ifelodun may have received the highest allocations of the 774 LGAs based on available data.
In 2018 the three LGAs received N 8.16bn, N6.82bn, and N5.93bn respectively.
In the said year, Ifedayo, Remo North, and Ewekoro got N 1.28bn, N 1.35bn, and N1.37bn respectively.
In 2018, a Twitter handle @AlimoshoOnline, said Alimosho had a budget of N1.45bn. It’s budgeted capital expenditure was N370.93m and its recurrent expenditure was N1.07bn.
According to data from StatiSense, a Nigerian data consulting firm, in the first nine months of 2020, Alimosho got N6.43bn, Abuja Municipal got N5.22bn, and Ajeromi/Ifelodun N4.83bn.
From January to June 2019, Alimosho had received N3.95bn, Abuja Municipal received N3.47bn, and Ajeromi/Ifelodun, N2.92bn.
Local governments in Lagos got N314.56bn in total for the year 2018, 2019, and 2020. LGAs in Kano got N272.52bn while those in Katsina got N201.90bn within the years under review, rounding off the top three states.
The states with the lowest cumulative local government allocations are Bayelsa, Gombe, and Ebonyi respectively. Within 2018 to 2020, they got N56.23bn, N70.71bn, and N75.44bn respectively.
Total allocation to local governments in 2018 was N1.66tn. In 2019, it reduced to N1.64bn. At the peak of the COVID-19 pandemic, allocation to local governments dropped to N1.56tn.
Northern Nigeria (19 states plus FCT) with 419 local government areas received N2.64tn, while Southern Nigeria (17 states) with 355 local governments got N2.21tn.
Nigeria operates a financial system where funds flow to the three tiers of government.
The federation account is the central pocket through which the governments – federal, state, and local governments – get funds for development projects as well as pay salaries.
Revenues into the Federation Account come from oil, relevant taxes, the Nigerian Customs Service trade facilitation activities, Company Income Tax, sale of national assets, and surplus and dividends from State Owned Enterprises.
Based on the current sharing formula, the Federal Government gets about 48.5 per cent, state governments 26.72 per cent, and Local Government 20.6 per cent from the federation account.
The President of the National Union of Local Government Employees, Mr Ambali Olatunji, said most of the money allocated to the LGAs were cornered by the state governments.
He said, “The money was allocated, but it wasn’t given to local governments. Twenty-five per cent of that money did not get to them.
“It was diverted using the Joint Account Allocation Committee by the state political actors. That is why NUGLE is at the frontline in the campaign for LGA autonomy.
Three-year FAAC allocations to LGs by state classification “These monies are being diverted and pilfered by state political actors relying on Section 162 of the constitution that says, ‘allocation of funds to the local government should be through joint accounts allocation committee and should be appropriated by Houses of Assembly’.
“We have realised that some laws were passed at the Houses of Assembly that have succeeded in emasculating local governments. And we also know that is why LGAs cannot live up to expectations.
“To make the matter worse, even internally generated revenue of LGAs are being seized by state political actors using state ministries, agencies.
“There are some laws that are contraventions to the constitution. For example, the collection of revenue on collectible items under schedule 4 of the constitution says some revenues are meant for local governments.
“The collection of revenue at the motor parks, garages are the exclusive right of the LGA. Collection of revenue on signage i.e., advertisement belongs to the LGAs.
“Collection of tenement rate belongs to the LGAs, but most Houses of Assemblies have passed legislations that contradict the constitution. They have promulgated some laws like the land use charge, enabling them corner revenues from the LGAs. LGAs can’t collect revenue under tenement rates.
“The creation of signage agencies diverts LGA revenues. The creation of park and garages board by the states is a contravention of the 1999 constitution Schedule 4.
“Presently, states are legislating on how to seize market fees collected by LGAs. This is a systematic destruction of the LGA system. If half of this money has got to the LGAs, the nation won’t be this bad.”
Olatunji added that most of the LGAs could not pay the salaries of their workers. He said that most of them did not even get enough to run their day-to-day activities.
Buttressing what Olatunji said, a source in the national headquarters of the Association of Local Government of Nigeria said, “Local governments in Enugu state pay some amounts to state government agencies. For instance, each LGA in Enugu pays N5m to Enugu State University of Science and Technology, Institute of Management and Technology, and Rangers International.
“In Lagos there is a pool. In 2004, the state government created Local Council Development Areas, 37 of them. So, there is conference 57. Allocations that should go to the legitimate LGAs in Lagos (20 of them) will go into the pool. From the pool, the money is distributed to all the 57 of them. The governor doesn’t touch the money, but money that should go to one, is spread to about three.”
An economist, a faculty member at the Lagos Business School, Bongo Adi said, “It is not about whether or not money is getting to them. Money does not get to them; that is just the truth of the matter. The state governors have annexed them; the state governors use them as their piggybank.
“We need to rethink the local government arrangement.”
He added that there was a need to bring the rural economy back into the mainframe economy in order to have a functional market system, an effective economy, and people-serving policies.