Minister Explains Delay in Direct Payment of FAAC to LGAs

The Minister of Finance and Coordinating Minister of Economy, Wale Edun, says there are “practical impediments” to the implementation of direct payment of allocation to local government areas (LGAs) from the federation account.

Edun spoke on Thursday at a press briefing in Abuja.

On July 11, the supreme court ruled that the federal government can disburse funds from the federation account directly to the LGAs, bypassing the state governments.

The apex court also ordered the federal government to withhold allocations of LGs governed by unelected officials appointed by a governor.

Speaking on the matter, Edun said the federal government is yet to commence implementation of the monthly allocations to local governments due to “practical impediments”.

The minister also said the process is still in its early stages.

“What has come to pass now is a new fiscal regime where through the state and local governments joint account funding goes directly to the local governments,” he said.

“There is a committee involving the attorney general, as well as local government representatives, states and of course the federal government comprising the federal account allocation committee (FAAC) that is looking at the practicality of moving to work with what the supreme court has said.

“There are practical impediments to yielding the implementation and governors have moved immediately to uphold the local government because funds have to go to the elected government.

“There was a FAAC meeting just last week but they could not implement it because the actual proceedings have not been handed down to the attorney general to start implementing. So that is what is going to happen.”

Edun also said the president believes in the rule of law and the supreme court’s judgement will be implemented.

The Nigeria Governors Forum (NGF), led by AbdulRahman AbdulRazaq, had said the fiscal autonomy of LGAs is a “relief from the financial burden to state governments”.