Rationality of Joint State and Local Government Accounts

Recently, the Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Engr. Elias Mbam, recommended the abolision State and Local government Joint Accounts (JAC) in states to ensure the sovereignty, transparency and accountability of local government administration in the country with the primary aims to strengthen and enhance the spirit of equity and equality in the revenue allocation among the three tiers of government.

For the agency as RMAFC to come out boldly to call for the scrapping of JAC further shows that the account is fraudulently operated or it is not addressed the intended purpose of its inclusion in the Constitution. RMAFC is in better position to know what goes in-and-out of the account, because as a Commission it is empowered by the Constitution to monitor the accruals into and disbursement of revenue from the Federation Account; review from time to time, the revenue allocation formula and principles in operation to ensure conformity with changing realities and advise the Federal, State and Local Governments on fiscal efficiency and methods by which their revenue is to be increased. Following this, the Commission is legally authorized to mediate among the Federal, State and Local Governments on such matters as allocation and disbursement of revenue.

Most people at the grassroots level are not aware that their local councils have been denied the authority to manage revenues due to their communities as the operation of the monthly allocations through Joint State and Local government accounts (JAC) are done secretly and under excessive control of governors of states.

The Joint State and Local government accounts (JAC) has been defined under Section 162 (6) of 1999 Constitution of the Federal Republic of Nigeria as that account “into which shall be paid allocation of the Local government councils of the state from the Federation Account and from the Government of the States.” The Federation Account has been the focal pool from which the three tiers of government in Nigeria derive their monthly allocation which is expected to be judiciously utilized in addressing socio-economic development of their localities. The overreliance and overdependence on the Federation Account expose financial weaknesses of many states that could collapse within few months if the free money were not allocated from Abuja. Yet most of the states still corner rightful allocation to their local government councils. By this they frustrate the administration and mandates of LGs as enshrined in the Constitution.

It is very essential to note that LGs have essential roles to play towards the national economic development as the closest tier to the masses. As far back as 1955 and 1965 local governments contributed about 12% to the public expenditure in Nigeria before the oil becomes the mainstream of revenue sources to the federation.

However, over the years, the Local government administration has been faced with series of developmental and economic challenges where different policies have rendered the councils incapacitated to discharge their constitutional mandates. This has been traced to the unjust treatment and annexation of their revenues by their governors in the name of Joint State and Local government accounts (JAC).

The councils have over the years suffered from the continuing whittling down of their powers, as the states continue to encroach upon what would normally have been the exclusive preserves of the Local Governments.

They are suppose to have financial autonomy but their chairmen are afraid to cobnfront their governor who  could easily sack them and replace them with administrators as it happens presently in many states. The council are completely muzzled without any independence to recruit and manage their staffs, raise and manage their finances, make by-laws and policies and discharge their functions as provided by law without interference from the higher governments.

The banning of the so-called Joint Account would give local councils autonomy, gain financial independent and political sovereignty. In other countries such an autonomy helps to give the communities concerned political power while holding them responsible for the effective administration of schools, health, social services, culture, urban and rural development and, in some cases, local policing.

I believe granting Nigeria’s Local governments the financial autonomy will forestall abuse of the funds by the state governments and enable them to exercise full power, monitor and disburse their funds appropriately and efficiently in such a way that would impact positively on their people at grassroots.

The suspension or outright abolition of the so-called JAC will mark a new phase for financial accountability and transparency in the mandates of the Local government.


Jimoh Abubakar
NYSC member writes from
Revenue Mobilisation Allocation & Fiscal Commission (RMAFC), Abuja.
[email protected]

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