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FAAC Delays Direct Disbursement to Local Governments

FAAC announces that January allocations for local governments will be disbursed through state accounts due to delays in account submissions.
FAAC local governments

The Federation Account Allocation Committee (FAAC) has confirmed that statutory monthly allocations will not be directly disbursed to the 774 local governments in Nigeria this month. This decision stems from the councils’ failure to meet the deadline for submitting necessary account details.

As a result, the funds earmarked for local governments will instead be allocated through their respective state governments. A FAAC official indicated that the January allocation, amounting to N361.754 billion, has already been transferred to state accounts because the councils did not fulfill the administrative requirements for direct disbursement.

The official stated, “If they have started submitting their accounts, their February allocations will go to them.” This means that if local governments expedite their processes and submit the required details promptly, they may begin receiving funds directly from next month, marking a step towards greater financial autonomy as envisioned by the Bola Tinubu administration.

In addition, while local governments face delays, funding for the Universal Basic Education Commission (UBEC) and Primary Health Centres (PHC) will continue to be sourced directly from the Federation Account.

FAAC has released a total of N860.252 billion for January, with N498.498 billion allocated to state governments and N361.754 billion designated for local councils. However, due to administrative hurdles, local councils are currently unable to access these funds directly.

The ongoing situation is compounded by efforts from the Office of the Accountant-General of the Federation (OAGF) and other stakeholders to address compliance issues stemming from a Supreme Court ruling aimed at ensuring local government autonomy. An inter-ministerial committee is working on a framework that would allow for direct deductions from FAAC allocations for essential services like education and healthcare, ensuring that local governments fulfill their constitutional obligations.

Despite these challenges, there is optimism regarding the eventual establishment of dedicated bank accounts for local governments with the Central Bank of Nigeria (CBN), which would facilitate direct transfers of monthly allocations once operational.

Stay tuned to 9am News Nigeria for more Breaking News, Business NewsSports updates And Entertainment Gists.

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