Investigations: LGs Remain Underdeveloped Despite N5.5trn FAAC Funds in 2025

*Governors continue to choke third tier of govt

Sunday Ehigiator

Despite a total of N5.5 trillion disbursed to Nigeria’s 774 local governments (LGs) by the Federation Account Allocation Committee (FAAC) in 2025, which was 48.6 percent higher compared with the total of N3.7 trillion disbursed in 2024, poverty and underdevelopment remain deeply entrenched at the grassroots.Analysts say the tight grip of State Governors over LGs’ finances, despite a 2024 Supreme Court judgement that granted financial autonomy to the local councils, continues to cripple local governance, turning councils into cash conduits rather than engines of development.

FAAC disbursed a total of N5.5 trillion to the LGs in 2025, according to data compiled by THISDAY. A breakdown of the data showed that in January 2025, the LGs were allocated a total of N434.6 billion, N410.3 billion in February, N387 billion in March, N406 billion in April, N419 billion in May, N444.9 billion in June, N485 billion in July, and N522 billion in August. Also, the LGs were allocated N530 billion in September, N505 billion in October, N445.3 billion in November and N513.3 billion in December 2026.

The data showed that while the federal government got a total of N7.8 trillion from FAAC in 2025, higher than the N4.95 trillion they got in 2024, according to a NEITI report, the 36 States and the Federal Capital Territory got N7.5 trillion.Investigations across several local councils and rural communities reveal that basic social services remain grossly inadequate, with many areas lacking functional primary healthcare centres, quality primary schools, potable water, and accessible rural roads.

In many communities, residents continue to rely on dilapidated facilities and informal support systems, with little evidence that increased fiscal transfers have translated into improved living standards or tangible development projects.Findings also suggest weak governance structures, poor fiscal transparency, and limited administrative capacity at the local level, raising questions about how public funds are utilised.

Civil society leaders argue that the autonomy granted by the Supreme Court remains largely theoretical, as governors allegedly continue to control local government finances and political structures.Speaking with THISDAY, the Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), Awal Musa Rafsanjani, said while the court ruling was a positive step, much more needs to be done to make autonomy meaningful.“I think let us get very clear. Although the court has given local government autonomy, including financial autonomy, the reality is that despite this autonomy, there’s a lot that needs to be put in place to ensure resources that get into the local government actually reduce poverty at the grassroots level,” Rafsanjani said.

He argued that the autonomy remains limited and has not manifested in tangible development outcomes.“The governors are still playing important roles in terms of what local governments do. For autonomy to work, there must be proper reforms that ensure the institutional capacity of the local governments. They still don’t have the required capacity to do the work they are supposed to do,” he stated.

According to him, years of administrative neglect have weakened the local government system, making it incapable of driving socioeconomic development or effectively implementing poverty intervention programmes.“Overnight, you don’t expect them to function efficiently, especially given the fact that the administrative structure is very weak. Many of the councillors don’t have the required fiscal and administrative skills and independence,” he said.Rafsanjani maintained that reducing poverty at the grassroots requires competent officials who understand fiscal management, administrative processes, and political independence.

“You are still dealing with issues of accountability, capacity building and transparency in the use of resources meant to tackle poverty. Many people who would have been skilled to work in local governments are not there. What you have are unskilled administrators who do not understand how to constructively deal with poverty in most local governments,” he added.He stressed that financial autonomy alone would not solve the problem unless it is institutionalised through constitutional reforms.

“We need constitutional amendments that will give more political, legal and financial autonomy to local governments for them to function and focus on developmental issues. Under our current law, state governments still make laws for local governments. There’s no way you can achieve genuine autonomy under such conditions,” he said.Questioning how N5.5 trillion could be allocated without a visible impact, Rafsanjani alleged that governors still direct how local government funds are spent.

“The truth of the matter is that this is money that has been directed on how it should be implemented by the governors. Every time state governments want to do something, they ask local governments to provide money. It is not about addressing poverty or inequality at the local level; it is an opportunity for governors to continue directing what the resources should be used for,” he said.

He described the current autonomy as existing “only on paper. If it were institutionalised, you would see clear improvements in the well-being of the people at the grassroots with this kind of money.“At the local government level, where insecurity is supposed to be tackled, you don’t see them playing that role. You don’t see improved primary education. The healthcare system at the local level has not improved. Markets that should boost revenue are not properly supported. Agricultural activities are not enhanced,” he said.He added that the absence of visible developmental projects across local councils raises serious questions about transparency and accountability.

Addressing concerns that many local government chairmen are allegedly loyal to governors who influence their emergence through state electoral bodies, Rafsanjani insisted that constitutional reform remains essential.“In my opinion, you still need a legal framework that will guarantee proper autonomy and functioning of local governments. You need to isolate them from the control of state governors who appoint and remove them at will.

“Grassroots democracy cannot function when chairmen are appointed and removed as the governors like. Constitutional amendments will give legal autonomy to local governments to operate independently. People with administrative skills and capacity can then emerge to manage resources properly,” he added.He warned that as long as governors continue to impose candidates, local governments would struggle to develop the competence required to manage public resources effectively.

“We need to ensure that states are not manipulating and controlling the political affairs of local governments. As long as they continue to choose and impose people, you will not get local governments to develop the necessary skills required to govern and manage resources at that level,” he concluded.In a similar vein, Executive Director of COMPPART Foundation for Justice and Peacebuilding, Saviour Akpan, said the credibility of local government elections remains at the heart of the problem.

“The challenge is anchored on the fact that no local government chairman in Nigeria can claim to have won any credible election. They are appointees of the governor who use the State Independent Electoral Commission to complete the roll call. The one paying the piper dictates the tune,” Akpan said.He called for the immediate scrapping of State Independent Electoral Commissions (SIECs), which currently conduct local government elections.

“The way out is the immediate scrapping of State Independent Electoral Commissions. Let the Independent National Electoral Commission conduct local government elections. Contestants should emerge through direct primaries, and only then can we say we truly chose our local government officials and they are answerable to us,” he said.Akpan alleged that under the present system, governors remain firmly in control of local councils.“For now, the governors are still in charge, with local government officials functioning as elected Special Advisers, while councillors operate like elected Personal Assistants,” he said.

Civil society groups insist that without structural reforms, constitutional amendments, and credible elections conducted by an independent body, the trillions allocated annually to local governments may continue to yield little improvement in living standards at the grassroots.They argue that strengthening fiscal transparency, enhancing administrative capacity, and insulating councils from state interference are critical steps toward ensuring that increased allocations translate into real development outcomes for ordinary Nigerians.