The Federal Government has reiterated its resolve to end the long-standing interference by state governments in funds allocated to the 774 local government areas from the Federation Account.

The pledge was made on Thursday in Abuja by the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Mohammed Shehu, during the 2025 budget performance appraisal and 2026 budget defence organised by the House of Representatives’ Committee on Finance.

Shehu lamented the persistent encroachment by state governments on local government finances, stressing that the commission was prepared to take concrete steps to ensure financial autonomy at the grassroots.

“The commission would like to establish a Local Government Committee now, like we used to do before the Supreme Court said we were busy bodies. Now, we will monitor every single Local Government in Nigeria.

“I’m glad that Mr President spoke to the governors himself, that ‘if you don’t allow this (local government autonomy), I will issue an Executive Order.’ The Commission is fully in support of Mr President over this course.

“The crisis we are having in Nigeria today is the lack of functionality of local governments, and every single one of us knows this. Even under the military, the local governments were performing much better,” he said.

The RMAFC chairman also commended the House Committee on Finance, chaired by Lagos lawmaker, Abiodun Faleke, noting that its guidance had strengthened the commission’s standing among key government institutions.

“I sincerely thank this committee for what you have done for RMAFC. You have brought us out. We are now being respected by almost all the revenue-generating agencies in Nigeria. Even before we knock now, they are knocking at our doors, having discussions with us, and some of the issues that have been over the years are being addressed by some of these revenue-generating agencies, whether it is the Nigerian Customs, Nigerian Upstream Petroleum Regulatory Commission, among others,” he added.

Speaking further on achievements recorded by the commission with the support of the committee, Shehu disclosed that RMAFC had carried out an audit of oil assets across the Niger Delta region.

He also informed lawmakers that work on a new revenue allocation formula for the three tiers of government, as well as for political office holders, was nearing completion. “Very soon, we will conclude. We have done everything. We are just about to finish analyzing the data and bring it before you.

“Remuneration of political office others is completed. We have submitted this through the Secretary to the Government of the Federation to the President. We hope that very soon, this will be transmitted to you so that it becomes a law. Of course, your own doesn’t require any legislation. It’s for ministers and others,” he said.

After the presentation of the 2025 budget performance and the 2026 budget defence, Faleke, who presided over the session, commended the management of RMAFC for its role in improving revenue generation for the country.

Interference in local government finances has remained a contentious issue in Nigeria’s federal system for decades. Although the 1999 Constitution recognises local government administration, allocations to it have often been hijacked by State governors through mechanisms such as the State–Local Government Joint Accounts.

In practice, this has enabled many states to withhold, deduct, or redirect local government allocations, undermining service delivery and governance at the grassroots.

Successive administrations, civil society groups, and labour unions have blamed the erosion of local government autonomy for poor development outcomes in rural communities, weak primary healthcare and education systems, and the general collapse of local governance structures.

Recent Supreme Court pronouncements and renewed federal pressure on states have brought the issue back to the forefront, with the Federal Government signalling a tougher stance, including the possibility of executive action, to enforce financial independence for local councils.