The Federal Government has reiterated its determination 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 (RMAFC), 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 ready 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 busybodies. Now, we will monitor every single local government in Nigeria,” he said.

He added that President Bola Tinubu had personally warned state governors against obstructing local government autonomy.

“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 on this course,” Shehu stated.

According to him, the dysfunction of local governments remains a major contributor to Nigeria’s governance challenges.

“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.

Shehu also commended the House Committee on Finance, chaired by Lagos lawmaker, Abiodun Faleke, noting that its oversight and guidance had strengthened RMAFC’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,” he said.

He added that agencies such as the Nigerian Customs Service and the Nigerian Upstream Petroleum Regulatory Commission had become more responsive, with long-standing issues now being addressed through improved engagement.

On achievements recorded by the commission, Shehu disclosed that RMAFC had conducted an audit of oil assets across the Niger Delta region.

He also revealed 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 analysing the data and bring it before you,” he said.

Shehu further noted that the review of remuneration for political office holders had been completed and submitted to the President through the Secretary to the Government of the Federation.

“We hope that very soon, this will be transmitted to you so that it becomes law. Of course, your own doesn’t require any legislation. It’s for ministers and others,” he added.

After the presentation, Faleke 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 councils have often been controlled by state governments through mechanisms such as the State–Local Government Joint Accounts.

In practice, this has enabled many states to withhold, deduct or redirect local government funds, weakening 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 rural development, 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 possible executive action, to enforce financial independence for local councils.