The Economic and Financial Crimes Commission (EFCC) has commenced a nationwide investigation into the financial activities of all 774 local government chairmen in Nigeria over concerns surrounding the management and expenditure of public funds since the councils gained financial autonomy.
The investigation covers local government areas across the 36 states and the Federal Capital Territory (FCT).
It is aimed at determining how council chairmen have utilised the funds allocated to their respective administrations and whether the resources have translated into meaningful development at the grassroots.
The anti-graft agency is particularly interested in examining the financial decisions of the council administrations, their expenditure records and the level of accountability demonstrated since the Supreme Court granted local governments financial independence from state governments.
The investigation is reportedly being handled by the EFCC’s zonal directorates, with officers conducting the exercise discreetly across the country.
Information about the development emerged following reports that local government chairmen in some states had come under scrutiny over their handling of council funds.
An official in a state Ministry of Local Government confirmed that the anti-graft agency had extended its investigation to all council chairmen in the state
“All the local government chairmen in the state are currently being probed by EFCC over their spending,” the official said.
However, sources within the commission indicated that the exercise was not restricted to any particular state but covered every local government area in the country.
One of the sources explained that the EFCC wanted to establish whether the councils had demonstrated the level of financial discipline and administrative competence expected following the Supreme Court judgment on local government autonomy.
According to the source, the commission is also examining whether the financial independence granted to the councils has produced measurable improvements in grassroots development.
The source said, “All the local governments across the country are being investigated. It’s discreetly being done. You know the Supreme Court ruling granted them financial autonomy. We want to know whether they are accountable.
“We want to see their definite impact on the economy as a result of the financial autonomy that has been granted them. We want to see whether they have the necessary managerial skills, and whether their integrity quotient is high.
“We want to see comparatively what was existing before the autonomy and what is existing now and whether there has been development. It is not about the state you mentioned alone; it is across the country. All the EFCC zonal offices are handling the investigation secretly.”
The nationwide exercise comes over concern on the management of local government finances following the Supreme Court’s landmark decision on financial autonomy in July 2024.
Before the judgment, local government allocations were largely managed through the existing joint account arrangements involving state and local governments.
The system had attracted criticism over allegations that some state governments exercised excessive control over funds meant for councils.
The Federal Government subsequently approached the Supreme Court to challenge the practice and seek an independent financial arrangement for local governments.
In May 2024, the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, filed a suit on behalf of the Federal Government against the 36 state governors.
The suit challenged the control exercised by state governments over local government allocations.
It also questioned the practice of dissolving elected council administrations and replacing them with caretaker committees.
The Federal Government maintained that the 1999 Constitution recognised democratically elected local government councils and did not provide for unelected caretaker committees to take over their responsibilities.
It also asked the apex court to stop state governors from receiving, withholding or controlling funds constitutionally meant for local government administrations.
On July 11, 2024, the Supreme Court delivered its judgment in favour of local government financial autonomy.
The seven-member panel, led by Justice Garba Lawal, ruled that state governments could not continue to control or withhold allocations belonging to local government councils.
The court also directed the Accountant-General of the Federation to pay allocations directly into the accounts of local governments rather than through state governments.
The commission had previously indicated its intention to monitor local government expenditure following the Supreme Court judgment.
In October 2024, EFCC Chairman, Ola Olukoyede, announced that the commission would monitor budget implementation across local government councils to ensure that public allocations were used for approved projects and programmes.
Olukoyede explained that the agency was prepared to work with relevant stakeholders to monitor financial activities at the grassroots and identify cases where public funds might have been diverted or mismanaged.
He also linked the commission’s decision to expand its zonal directorates to the need for wider coverage and improved monitoring of government expenditure across the country.
The EFCC chairman said, “We are fully prepared to ensure accountability in the use of local government funds. One of the reasons that informed the decision to establish additional zonal directorates by the commission is the need to improve the commission’s presence and coverage of the country.
“We’ll work closely with stakeholders in tracking the budget performance of the councils, to ensure that funds appropriated are used for specified purposes and those who violate the law will be brought to justice.”
The EFCC is expected to establish whether council chairmen have complied with financial regulations and whether any breaches warrant further investigation or prosecution.
Meanwhile, efforts to obtain an official response from the EFCC spokesperson, Dele Oyewale, were unsuccessful as of Monday night when the report was being prepared.
The commission has yet to publicly provide further details about the individual councils being examined, the specific financial records under review or whether any council officials have been invited for questioning.
