States Withheld N1.46 Trillion in LG Funds in Q1 2026 Despite Supreme Court Ruling

State governments retained N1.46 trillion meant for Nigeria’s 774 local government councils in the first quarter of 2026, continuing to defy the July 2024 Supreme Court judgment that ordered all federal allocations to be paid directly to democratically elected councils — not through state governments.

Figures from Federation Account Allocation Committee reports, the Office of the Accountant-General, and the National Bureau of Statistics, collated by The Punch, show that councils received N537.88 billion from January revenue in February, N456.47 billion from February revenue in March, and N468.83 billion from March revenue in April — totalling N1.46 trillion over the quarter.

While this represented a 19 per cent increase over the same period in 2025, the disbursement mechanism remained unchanged: state governments still received and processed the funds before passing them on to councils, in direct contradiction of the Supreme Court’s ruling that states had “no constitutional authority to retain, spend, or control funds standing to the credit of local government councils.”

The Association of Local Governments of Nigeria, the National Union of Local Government Employees, and other groups have described the continued defiance as a systemic frustration of judicial authority, noting that almost two years after the landmark judgment, full implementation remains stalled.

The total distributable revenue to all three tiers of government stood at N6.97 trillion in Q1 2026, down from N7.40 trillion in the same period of 2025 — a decline driven primarily by lower derivation payments to oil-producing states. Local governments accounted for approximately 20.99 per cent of the total distributable pool.

The Federal Government received N2.04 trillion in the quarter, up 23.7 per cent year-on-year, while state governments collectively received N2.10 trillion, up 24.7 per cent. Oil-producing states received N321.90 billion in 13 per cent derivation, down N72 billion or 18 per cent compared to Q1 2025.

The persistent non-compliance with the autonomy ruling has drawn calls for stronger enforcement mechanisms, including direct CBN transfers from FAAC to council accounts — a measure the federal government has said it supports but has yet to fully implement.

Sources: Punch, Blueprint