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 about the management and expenditure of public funds following the councils’ financial autonomy.

The investigation covers local government areas across the 36 states and the Federal Capital Territory (FCT), with the anti-graft agency seeking to establish how council chairmen have utilised funds allocated to their administrations and whether the resources have translated into meaningful development at the grassroots.

PulseNets learnt that the investigation is being coordinated through the EFCC’s zonal directorates, with officers discreetly examining the financial activities of local government administrations across the country.

The exercise is particularly focused on expenditure records, financial decisions, accountability and the level of administrative performance demonstrated by council chairmen since the Supreme Court granted local governments financial independence from state governments in July 2024.

The development follows growing concerns over the management of local government allocations and whether the financial autonomy granted to the councils has resulted in improved service delivery and development at the grassroots.

An official in a state Ministry of Local Government confirmed that the investigation had extended 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 investigation was not restricted to any particular state but covered all local government areas nationwide.

EFCC Examines Spending, Accountability of Local Government Chairmen

One of the sources explained that the Commission was interested in determining whether local government administrations had demonstrated the financial discipline and managerial competence expected following the Supreme Court judgment on local government autonomy.

According to the source, the investigation would also establish whether the financial independence granted to the councils had 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.”

PulseNets understands that the Commission’s assessment is expected to compare the performance of local government administrations before and after the introduction of financial autonomy, particularly in terms of public spending, administrative capacity and development projects.

The investigation is also expected to establish whether council chairmen have complied with existing financial regulations and whether any identified breaches warrant further investigation or prosecution.

Background: Supreme Court Granted Local Governments Financial Autonomy in 2024

The nationwide investigation comes amid continuing concerns about the management of local government finances following the Supreme Court’s landmark judgment 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 arrangement had attracted criticism over allegations that some state governments exercised excessive control over funds constitutionally allocated to local government councils.

In May 2024, the Federal Government, through the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, instituted a suit at the Supreme Court against the 36 state governors to challenge the existing financial arrangements.

The suit questioned the control exercised by state governments over local government allocations and the practice of dissolving elected council administrations and replacing them with caretaker committees.

The Federal Government argued that the 1999 Constitution recognised democratically elected local government councils and did not provide for unelected caretaker committees to assume their responsibilities.

It also asked the apex court to restrain state governors from receiving, withholding or controlling funds constitutionally meant for local government administrations.

On 11 July 2024, the Supreme Court delivered its judgment in favour of local government financial autonomy.

The seven-member panel ruled that state governments could no longer 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 routing the funds through state governments.

EFCC Had Earlier Promised to Monitor Local Government Spending

The latest investigation also follows the EFCC’s earlier announcement that it would monitor the implementation of local government budgets to ensure that public funds were used for approved projects and programmes.

In October 2024, EFCC Chairman, Ola Olukoyede, disclosed that the Commission was prepared to work with relevant stakeholders to monitor financial activities at the grassroots and identify possible cases of diversion or mismanagement of public funds.

Olukoyede also linked the Commission’s decision to expand its zonal directorates to the need for wider geographical 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.”

PulseNets reports that the current nationwide exercise represents a further step in the Commission’s efforts to monitor how local government administrations manage public resources following the implementation of financial autonomy.

EFCC Yet to Disclose Details of Councils Under Investigation

The EFCC is expected to determine whether local government chairmen have complied with financial regulations and whether any financial misconduct uncovered during the exercise requires administrative or criminal action.

However, the Commission has yet to publicly disclose the specific local government councils being examined, the financial records under review or whether any council chairmen and other officials have been invited for questioning.

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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 also not issued a detailed public statement confirming the scope, findings or expected timeline of the investigation.

The outcome of the exercise is expected to provide further insight into the management of local government resources and whether the financial autonomy granted by the Supreme Court has translated into improved accountability, transparency and development at the grassroots.