A Kano State High Court has issued a perpetual injunction restraining the Central Bank of Nigeria (CBN) from withholding funds allocated to the 44 local government areas (LGAs) in the state.
The court ruling, delivered on Monday, February 17, comes after a motion was filed by the applicants, including the Chairman of the Nigeria Union of Local Government Employees (NULGE), Ibrahim Muhd, and others.
The motion, filed on November 1, 2024, sought to prevent the respondents comprising the Accountant-General of the Federation (AGF), the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the CBN, and several commercial banks from withholding or delaying monthly financial allocations meant for local governance in Kano State.
The case follows a backdrop of delays in the direct transfer of monthly allocations to local governments, despite a Supreme Court ruling in July 2024 that granted financial autonomy to local government areas (LGAs) across Nigeria.
This delay, which has hindered effective local governance, has caused concern in Kano, where officials argue that withholding these funds violates the constitutional rights of local residents.
Justice Ibrahim Musa-Muhammad, who presided over the case, held that the applicants had successfully proven their case.
In his judgment, he referenced the Supreme Court’s decision in Suit No SC/CV/343/2024 vs Attorney General of Abia State and 35 others, which mandates that the AGF, CBN, and RMAFC are required to disburse monthly allocations to democratically elected councils in line with the provisions of the 1999 Nigerian Constitution.
The court ruled that any action that prevents or delays the transfer of these funds would constitute a breach of the fundamental rights of the people residing in the affected LGAs.
The court further declared that withholding allocations would violate several sections of the Nigerian Constitution, particularly Sections 33, 42, 43, 44, 45, and 46, as well as Articles 13, 19, 22, and 24 of the African Charter on Human and Peoples’ Rights. Justice Musa-Muhammad reaffirmed that the CBN, AGF, and RMAFC are legally obligated to ensure that funds accruing to the Federation Account are properly distributed to the local governments.
In his submission, the counsel for the applicants, Mr. Bashir Yusuf-Muhammad, argued that the respondents’ actions had caused significant hardship and were unlawful.
He urged the court to dismiss the respondents’ counter affidavit and grant the reliefs sought by the applicants.
Representing the 44 local governments, Ibrahim Isa-Wangida, holding brief for Senior Advocate of Nigeria (SAN) Eyitayo Fatogun, did not oppose the application, affirming that the timely disbursement of LG allocations was crucial for the smooth operation of local governance.
The CBN, however, filed a notice of preliminary objection on November 14, 2024, challenging the court’s jurisdiction to entertain the case, and requested that the CBN be removed from the suit.
Counsel for the commercial banks, including UBA, Keystone Bank, and Guarantee Trust Bank, similarly argued that their clients had no role in the disbursement process and requested that the court strike out their involvement in the case.
Despite the objections, the court maintained its stance, siding with the applicants, and emphasised that the withholding of funds would not only harm local governments but also infringe on the rights of the citizens they serve.
This ruling is seen as a significant victory for local governance in Nigeria, as it affirms the constitutional rights of local governments to receive their rightful allocations from the Federation Account.
The ruling also places pressure on the relevant agencies, including the CBN, to ensure that financial autonomy for local governments is respected and implemented across the country.
