Local Government Autonomy: The Truth, The Fallacies And The Dangers Ahead

By Fred Edoreh

Somehow, our national conversation shifted from the inflationary cost of living occasioned by surely needed but poorly managed petroleum subsidy removal and untutored foreign exchange management policy, to a new-old national anthem and, more recently, to a charade about local government autonomy.

There has been an interesting propaganda that the reason why the local governments are unable to function effectively in the delivery of infrastructure is because state governors “steal” their money through the Joint Account.

Former President Muhammadu Buhari painted a sordid picture of this when, in December 2022, he told the members of the Senior Executive Course of the National Institute for Policy and Strategic Studies, that “if the money from the Federation Account to the state (joint account) is about N100m, N50m will be sent to the chairman, but he will sign that he received N100m. The governor will pocket the balance and share it with whoever he wants to share it with. And then, the chairman of the local government must see how much he must pay in salaries and to hell with development. When he pays the salaries of the big men, the balance he will put in his pocket.”

Buhari merely re-echoed former President Olusegun Obasanjo who earlier in October 2012, at the maiden International Conference on Politics, Security and Development held at Babcock University, similarly raised the same accusation against state governors.

As far back as in April 2004, Jude Ajani, writing in the Allafrica.com, had detected the allegation as a dummy which the FG had constructed to counter the request for true federalism and resource control on which the majority of the Southern governors, especially, were challenging the federal government.

President Bola Ahmed Tinubu has now made a dance of it by suing the state governments at the Supreme Court, praying for the financial autonomy, by way of direct transfer of federal allocations, to the local governments, which was granted.

Surely, the independence of local governments as the third tier of our governance structure is very desirable, and the ruling of the Supreme Court, notwithstanding the provisions of Section 162 which says there should be a joint account, and especially on the non-acceptability of Caretaker Committees for LGAs administration, leads us in that direction.

However, in search of the truth about the failure of our local governments and, by extension, our national development, the big questions are: Do the state governors truly steal the allocations of local governments? How common or widespread is this practice across the states? How many and which state governors have been indicated for the practice? Could the allegation be a case of one finger touching oil and then staining the rest? Is the alleged stealing really what has constrained the capacity of local governments to deliver on infrastructural development and social services? Is the financial autonomy of the local governments, now merely to be expressed by direct transfer of federal allocations to them, the recipe for the effectiveness of local governments in delivering development through our local communities?

Replying to President Obasanjo at the Babcock University conference, then Governor of Ogun State, Ibikunle Amosun, disclosed that, contrary to the accusation, his government had been augmenting funding for local government administration and projects in Ogun State.

When the government of Rt Hon Sheriff Oborevwori of Delta State approved the recruitment of over 2000 teaching and non-teaching staff across the local government councils, the Chairman of the state chapter of the Nigeria Union of Teachers, Comrade Titus Okotie, was happy but he expressed caution about rapidly increasing the number in view of the ability of the local governments to match employment with payment of salary.

“It is one thing to employ and another thing to be able to pay. Up till today, the state government is still augmenting the minimum wage of primary school teachers with N113m every month. The approval for more teachers means more cost in the augmentation which otherwise should have been the sole responsibility of the local governments,” he informed.

Also reacting to the Supreme Court ruling, a former Chairman of Sapele Local Government Council, Okakuro Godwin Atose, corroborated that in Delta, it is rather the state government that is sustaining the local governments.

“They say they (governors) finger local government funds. I served when Uduaghan was Governor of Delta State and I make bold to say that he was augmenting teachers salary with the sum of N200m every month (to support the local governments whose responsibility it is). If their money was enough why are they augmenting it?

“When we go to JAC, the tables are displayed there – federal allocation, VAT, Excess Crude, IGR. From the total internally generated revenue by the state, 10% goes to the local governments. If we generate N10 billion, 10% of the N10 billion will be shared across the 25 local government areas.

“Some local governments are urban and the teachers clamour to stay in the urban areas. As a Council Chairman then, when I was paying teachers’ salary with N65m monthly, Warri North was paying just N19m because it is a riverine, rural area, with a lower number of teachers. In the face of that, Uduaghan had to be giving the LGAs about N200m monthly to augment, to enable us pay teachers’ salary.

“So, if as claimed that government is fingering local government funds, why will somebody finger and then augment?

“Thank God the autonomy is now there but with this clamour for increase in wages of workers, in no distant time, we may hear that some local governments cannot pay teachers’ salary any longer, even with the direct allocation.”

With these revelations, and while not ruling out the possibility of corrupt practices in some states, it is obvious that the talk of governors stealing local government allocations is not completely and generally true.

I worry that in seeking solutions to the stagnation, sometimes retrogression, in our national development, our conversations and policy actions often tend to be more driven by the need to pass the buck rather than sincerely examining and proffering honest panaceas.

The problem with local governments in Nigeria is simply that the nation has put a burden on them that they cannot bear and then also effectively and adequately deliver on the needed provision of infrastructure.

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The heaviest of the burden is in the responsibility of paying primary school teachers salary, as well as other supply and maintenance costs for primary education, alongside payment of primary health care and council workers salaries, allowances, pension and gratuity, albeit with very poor federal allocation.

Whereas the federal, states and local governments share concurrent responsibilities in managing basic and primary education through UBEC, the SUBEBs and the LGEAs, the allocation to local governments is often completely eroded after deductions of these salaries and other obligations, such that they are no longer able to carry out any projects. It is as simple as that.

A 2003 World Bank report estimated that local governments contribute about 80% of the cost of funding primary education in Nigeria, while the states do about 20% and the federal government does just 2% from the consolidated revenue.

The funds for primary education are deducted from the LGAs federal allocations and channeled through UBEC to SUBEBs, then to the Local Education Authority (LGEAs).

Incapacitated after the deductions, they can no longer venture into building classrooms, talk less of constructing roads and bridges in local communities. The states have had to assume these responsibilities across all their LGAs.

The poverty of the local governments can be seen in the fact that in Nigeria’s 2023 budget of about N21.8 trillion, only about N2.5 trillion went to all the 774 local government councils across the 36 states and the FCT.

That gives us an average of about N3.2 billion per LGA per annum, though far lower before now, and of course with differences in the actual figures to particular local governments, some more, some far less.

For some urban local governments, the cumulative wage bill for primary school teachers, primary health care and council workers can consume over N2 billion or more. Then there would be further deductions for maintenance of school buildings, procurement and distribution of furniture, supply of chalks, teaching boards, dusters and sundry educational materials.

We should also factor in the overhead for running the councils – provision for local security, working with the police and vigilantes, the chairman’s office, the councils’ legislative arms with the numbers of councillors, their salaries and allowances.

There is also the issue of payment of pension and gratuity to retired teachers, primary health and local council workers.

In Delta State, for instance, knowing that the local governments which have the responsibility cannot pay, the pensioners smartly put the task to the state government which for some years tried to support the councils by providing monthly allocations to help them in defraying pensions arrears. That was until the Sheriff administration made them aggregate the total arrears of pensions and guaranteed a five-year term bond of N40 billion to clear the outstanding, so as to give life to our senior citizens.

Let us even assume that at the end of fulfilling those obligations each council is left with about N1 billion, even though most unlikely, what can that meaningfully amount to, for the construction of roads, bridges, housing and even reasonable support for agriculture, talk less of such things as provision for human capital development, electricity, irrigation dams, reasonably equipped and staffed primary health care centres and further payment of pensions and gratuity?

A World Bank report of 2012 suggested that it would cost between N400m and N1b to construct a 1km road, that is minding differences in terrain, and excluding bridges and drainages which are costed separately. It is over a decade of galloping inflation after that report. Some global industry institutions estimate the cost of a standard 1km road at $2m, about N3.2b, going by our current exchange rate.

Also, the construction of roads in the Niger Delta, for instance, is well known to be costlier than in the North, sometimes four times over. As we have heard, the cost of the Lagos-Calabar Coastal Highway is being discussed at about N4b per km.

How can local governments approach those costs to construct roads, bridges and other meaningful infrastructure with about N3b yearly allocation of which huge wage bills are first deducted?

Therefore, the issue of making our local governments more effective goes beyond the propagandist accusation against state governors and the mere direct transfer of paltry federal allocations to them which we now describe as financial autonomy.

The question is: How much is being allocated to the local governments? What is the rationalisation for their share of federal allocation? How much of their allocation goes for salaries and overheads and how much is left for them to venture into meaningful infrastructure development and other social services? Do we still wonder why local governments report the construction of three or four-room public toilets as achievements in three years?

In the pursuit of development, we need to be true with and hard on ourselves, because the truth sets us free. If we are sincere about making our local governments work, we have to reconsider that, being the closer government to the people, the 774 LGAs have to enjoy greater allocation from the national revenue than the federal government.

As we speak, the national revenue allocation formula is about 52% in favour of the federal government, about 26% to the states and about 20% to the 774 LGAs which definitely have more roads, more schools, more health centres, more drainages, more refuse, more markets, in fact, have all the people and communities to take care of than the federal government does.

If the revenue sharing formula is not reversed in favour of the local governments we would remain merely deceiving ourselves with direct transfer. It remain like demanding potency from castrated lambs.