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Supreme Court ruling: Long Walk to Councils’ Autonomy

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By Taiwo Adisa

When the Supreme Court of Nigeria on July 10 gave a landmark ruling granting financial autonomy to the 774 local governments operating in the country, the nation’s political firmament was thoroughly shaken. Some accused the apex court of practically murdering federalism. Others, however, hailed the ruling as capable of igniting development at the grassroots.

Local governments have suffered more than enough in the hands of the states, which have lorded over them, using the instrumentality of Section 162 (6) of the 1999 Constitution, which mandates each state to operate a joint state and local government account, into which “shall” be paid all allocations to the local governments of the state from the federation account.

With the constitutional provision, the states have become the masters of the game. Many states emasculate the local governments at will, initiating contracts in their name and paying the funds at source. However, there is no commonality to this occurrence because some states allow their councils to run. The number is, however, negligible. The majority of the states don’t allow such freedom. What we have seen is an extreme situation on either side. Those who allow the councils some elements of freedom do it well, while those states where they are denied the oxygen to survive equally do it to a ridiculous extent.

Imagine a council where the chairmen were given N300,000 each in one month to run their affairs. What would such a chairman do? He will simply walk into thin air, hide away for the next one month, and resurface when another allocation is due, hoping to get a better cut. The sad thing with the scenario is that the chairmen know what accrued to their councils. They are even made to sign away the money, while their bosses in the Government Houses decree the Accountants General to wheel them the paltry amount they deem.

You can, therefore, imagine the extent of joy that erupted in such states when they heard of local government autonomy. The Supreme Court, in granting the ruling, which caught the governors off guard, decreed its immediate implementation. Not a few were apprehensive going to the end of July. However, it became clear that the July allocation couldn’t suffer from the apex court judgment because the funds to be shared in July were for accruals in June. Thereafter, news came to town that the Federal Government was allowing a three-month window, having set up an implementation committee and possibly to allow the states to tidy up things as far as the council elections were concerned.

One good thing the ruling has done thus far, however, is the rush to conduct council polls it has ignited in the states. At least ten states have either completed council polls or initiated moves to conduct the same after the ruling.

Aside from that development, it’s been a waiting game. Though some would say that the three-month window appointed by the Federal Government has been delaying the coming to effect of the judgment, my checks have revealed that the Federal Government, which initiated the case is even at sea as to its implementation.

Some of the issues that would constitute impediments, said to have been raised by the Governors’ Forum through the National Council of States include the payment of primary school teachers, primary healthcare centres, and other social services the councils are supposed to handle exclusively. The state universal basic education boards are agents in the hands of the state governments. They supervise primary and basic education. They recruit the teachers and expect their salaries to be deducted from the councils. There is no template to execute that at the council level. The primary healthcare boards are also domiciled at the state level. But they supervise the staffing of the primary healthcare centres. A major concern for the states is that the number of teachers and primary healthcare workers is not evenly distributed among the urbanised councils and the councils in the hinterland.

The allocation of a local government in the urban center may easily be wiped out after making such payments due to the number of such institutions in the urban areas. The councils in the hinterlands could be swimming in excess funds. That was a challenge during the military. We have seen the Nigerian Union of Teachers raising its voice against returning their salaries to the councils. Maybe the problem experienced hitherto partly informed the state and local government joint account initiative, but you don’t jump from a frying pan into a naked fire.

That attempt to resolve the salary overload of city councils as witnessed during the military era, has only retarded progress in the councils. A win-win situation for the sake of development should come on board. One way of solving the problem could be to create an account at the state level where each council would be mandated to pay a percentage of its funds to cover the salaries of primary school teachers and funds for the running primary healthcare centres. That could be the win-win solution. As we can see, some governors who are bold enough have merely turned council funds into their pocket money. Like the example of one northern state that allocated N300,000 to each council chairman as a monthly allocation!

My message to those who jubilated on July 10 is that there is a long way to go. The Federal Government has moved from the original implementation committee to another sub-committee, which no one knows its timeline. The initiator of the council autonomy initiative is stuck, and so the councils are stuck. You can see that so far, no one has requested the accounts of the councils. No one is engaging their accounting officers. Or, how does the Federal Government intend to send the money to individual councils without their separate account details?

But I am not alone in this pessimism on the council autonomy gambit. Senior Advocate of Nigeria, Chief Niyi Akintola also has words for the Federal Government. He said last week that the ruling of the Supreme Court may just remain a paper tiger. The Yoruba call that esin inu iwe (the picture of a horse on the page of a book can’t move an inch). It can neither run nor convey anyone.

The Ibadan Chief said: “By and large, the implications of the judgment have been clearly identified in this paper, but its prospects as to good governance depend more on its implementation; otherwise, the judgment will remain another paper judgment like the onshore and offshore judgments of the Supreme Court, the Child Rights Act, or better yet, the Bigamy Act…”

According to him, legs 1, 2, 3, 4, and 8 of the 11 declarative reliefs granted by the court were mere reinstatements of earlier judgments of the apex court, adding that the use of the word “shall” in subsection 162 of the Constitution imposes a duty on the Federal Government to pay the allocations only through the joint accounts.

Now, how do you shave somebody’s head in his absence? It’s a tall dream. To repeal subsection 162 (6) and free not just the councils but the Federal Government itself of some obligations, you need at least 24 state houses of assembly. The assemblies are in the inner pockets of the governors. This could be a vital signal for proponents of the much-desired restructuring of the Nigerian polity. It is a sign that changing the change as leaders of the Peoples Democratic Party sang during President Muhammadu Buhari’s first term in office, won’t be a walk in the park. Collecting the seed from the palm kernel demands hard work. And as Shakespeare’s Mark Anthony puts it in Julius Ceasar; “ambition should be made of sterner stuff.” He who shall eat the egg that is embedded in the belly of a hard rock will sharpen his axe. If the Federal Government is desirous of liberating council funds in aid of its advertised council autonomy, it must pull its acts in one direction. Else, the status quo remains.

   

About author
Time Nigeria is a modern and general interest Magazine with its Headquarters in Abuja. The Magazine has a remarkable difference in editorial philosophy and goals, it adheres strictly to the ethics of Journalism by using the finest ethos of the profession to promote peace among citizens; identifying and harnessing the nation’s vast resources; celebrating achievements of government agencies, individuals, groups and corporate organizations and above all, repositioning Nigeria for the needed growth and development. Time Nigeria gives emphasis to places and issues that have not been given adequate attention by others. The Magazine is national in outlook and is currently being read and patronized both in print and on our vibrant and active online platform (www.timenigeria.com).
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This is not a story about a reluctant investor. It is a story about capital that wants to move, cannot find enough places willing and able to receive it in a form it can underwrite, and quietly waits instead. Multiply that fund by the hundreds of pension schemes, sovereign wealth vehicles, commercial banks and infrastructure funds now carrying dedicated allocations for emerging-market infrastructure, and a pattern emerges that rarely makes it into a headline: the world is not short of capital for infrastructure. It has capital in historic abundance, sitting adjacent to a historic infrastructure gap, unable to cross the distance between the two. 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Availability Is Not Deployability  Capital availability and capital deployability are not the same condition, and the conflation of the two is doing real damage to how the world thinks about the infrastructure gap. Availability asks whether money exists somewhere with a mandate that could, in principle, be pointed at infrastructure. Deployability asks something much narrower and much harder: whether a specific project, at a specific moment, has been engineered, structured, documented and de-risked to the point where an investment committee can approve it without exception. The first condition is met, overwhelmingly, across nearly every category of capital that matters to infrastructure. The second is met by only a small fraction of the projects competing for it. The result is a market that looks, from the outside, like a financing gap, and functions, from the inside, like a conversion problem: an abundance of capital on one side, an abundance of infrastructure need on the other, and an underbuilt set of mechanisms in between capable of turning one into the other at any meaningful scale. Where the Conversion Breaks  The break does not happen at the ends of the process. It happens in the middle, in the unglamorous sequence of work that turns a plausible concept into an instrument a fiduciary can sign. A promising transmission project needs a feasibility study rigorous enough to survive institutional scrutiny rather than optimistic enough to attract early interest. It needs offtake arrangements that hold up under real counterparty and currency risk, not the counterparty risk assumed in a base case. It needs environmental and social documentation calibrated to the standards of the institutions being asked to fund it, not the standards of the jurisdiction hosting it. It needs a legal and commercial structure that allocates risk in ways a commercial lender, not only a development financier, will accept. It needs a sponsor capable of executing what has been proposed, not merely capable of proposing it. 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It consists of project preparation facilities able to fund feasibility and structuring work before commercial viability has been proven. Transaction advisers capable of building deals that satisfy development mandates and commercial return thresholds at once, rather than treating the two as separate constituencies to be managed sequentially. Risk-sharing and guarantee instruments that convert political, regulatory and currency risk into something a commercial balance sheet can underwrite. Aggregation platforms that bundle smaller, individually sub-scale projects into portfolios large enough to justify institutional transaction costs. Standardised documentation that reduces the bespoke legal cost of every new deal. And coordination across ministries, regulators and financiers robust enough that a technically sound project does not die in bureaucratic sequencing after the money has already been found. 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