Should Allocations Be Paid Directly to the Local Government Councils?

CASE TITLE: AG OF THE FEDERATION v. AG OF ABIA STATE & ORS (2024) LPELR-62576(SC)

JUDGMENT DATE: 11TH JULY, 2024

JUSTICES: MOHAMMED LAWAL GARBA, J.S.C.
EMMANUEL AKOMAYE AGIM, J.S.C.
CHIOMA EGONDU NWOSU-IHEME, J.S.C.
HARUNA SIMON TSAMMANI, J.S.C.
MOORE ASEIMO ABRAHAM ADUMEIN, J.S.C.
HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.
JAMILU YAMMAMA TUKUR, J.S.C.

PRACTICE AREA: CONSTITUTIONAL LAW

FACTS:

The suit was initiated on May 24, 2024, challenging the actions of the 36 states of Nigeria regarding their obligations to ensure democratic governance at the local government level. The plaintiff argued that state governments, through their governors and state houses of assembly, are required by the Nigerian Constitution to maintain democratically elected local government councils. The suit contended that the states’ actions of dissolving these councils and replacing them with caretaker committees were unconstitutional. In summary, the plaintiff sought the following reliefs, thus:

“1. A declaration that, according to the Constitution of the Federal Republic of Nigeria, the 36 states of Nigeria must ensure democratic governance at the local government level.

2. A declaration that the 36 states of Nigeria cannot lawfully dissolve democratically-elected Local Government Councils using state power from state Laws or Executive Orders.

3. A declaration that no state can replace democratically-elected Local Government Councils with Caretaker Committees or similar entities.

4. A declaration that the dissolution of democratically-elected Local Government Councils by any state is unlawful, unconstitutional, null, and void.

5. A declaration that the Federal Government is not obligated to allocate funds to a state from the Federation Account if there are no democratically elected local government councils in place.

6. A declaration that states in breach of the Constitution by not putting in place democratically elected local governments are not entitled to receive and spend funds meant for local governments.

7. A declaration that any state official who dissolves democratically-elected Local Government Councils has committed a gross misconduct and breached the Constitution.

8. A declaration that any state dissolving democratically elected Local Government Councils is not entitled to revenue allocation and the operation of a Joint Account until the status quo is restored.

9. A declaration that all funds received by a state for the benefit of its Local Government Councils must be remitted immediately and without deductions or delays to the Local Government Councils.

10. A declaration that any state official dissolving democratically-elected Local Government Councils is liable for criminal offenses related to breach of the Constitution.

11. A declaration that states must not operate the State Joint Local Government Account to the disadvantage of democratically elected Local Government Councils.

12. A declaration that the funds allocated to Local Government Councils in the Federation Account should be paid directly to them.

13. A declaration that a State Government acts merely as an agent for Local Governments to collect and pay funds from the Federation Account directly to the Local Governments.

14. A declaration that funds received by a state on behalf of Local Government Councils must be paid directly to each Local Government without delay.

15. A declaration that a Local Government council is entitled to direct payment from the Federation Account if the State Government fails to remit the funds.

16. An injunction restraining the Defendants from receiving, spending, or tampering with funds released from the Federation Account for Local Government Councils when no democratically elected local government system is in place.

17. An order that the Federation should pay funds directly to Local Governments in a state from the Federation Account if the State has failed to pay the amounts received on their behalf.

18. An order for immediate and successive compliance by the states with the terms of the judgment and orders made in this suit.

19. Any other orders the Honourable Court deems fit to make in the circumstances of this case.”

The defendants responded with preliminary objections and counter-affidavits, to which the plaintiff replied with further affidavits and a composite written address.

ISSUES FOR DETERMINATION:

The Court determined the merits of the suit.

COUNSEL SUBMISSIONS:

The plaintiff argued that the states have persistently refused to allocate funds from the Federation Account to the Local government Councils, in violation of Sections 162(4), (5), and (6) of the Nigerian Constitution. The plaintiff claimed that this refusal justifies the Federation’s direct payment of these funds to the Local Government Councils to uphold the Constitution’s objectives. Additionally, the plaintiff contended that the states’ practice of governing local areas through appointed caretaker committees, interim councils, and administrators violates Sections 1(2) and 7(1) of the Constitution, thereby threatening the existence of local governments as a third tier of federal governance.

The defendants collectively argued that the Federation cannot directly pay funds to the Local Government Councils without violating Sections 162(5) and (6) of the Constitution, which mandate that such funds be paid to the states for the benefit of their local councils and deposited into a State Joint Local Government Account. They asserted that the states are entitled to manage these allocations for the local councils’ benefit. The defendants also claimed that the failure to hold democratic elections for local government councils was not intentional but due to existing Court orders preventing such elections.

DECISION/HELD:

The Court held that the plaintiff’s claim had merit and accordingly succeeded. The reliefs sought were granted.

Abiru JSC however granted some of the reliefs sought but dismissed others. His Lordship agreed that States must ensure democratic governance at the local level and cannot dissolve elected local councils or replace them with caretaker committees. The Honourable Justice also stated that States without democratically elected local councils are not entitled to local government funds from the Federation Account and that state officials dissolving such councils breach the Constitution. However, his Lordship dismissed requests for direct payments to local councils from the Federation Account, liability for officials dissolving councils, and other specific financial declarations. He issued an injunction to prevent states from tampering with local government funds if there are no elected councils.

RATIO:

CONSTITUTIONAL LAW – REVENUE ALLOCATION: Whether Local Government Council allocations from the Federation account can be paid directly to the Local Government Councils

“I think that the approach of direct payment to the Local Government Councils would achieve the intention and purpose of the constitution and accord with the smooth running of the system of paying Local Government Councils their allocations from the Federation Account.

In our present case, the person or body saddled with the constitutional responsibility to implement a method or procedure for the enjoyment of a right created by the Constitution is using that role to destroy that right. In a situation such as this, the Constitution should not be applied in a manner as to support the destruction of the said right.

The demands of justice require a progressive application of interpretative criteria in the interpretation and application of the Constitution or other statutes. So that the use of a literal and narrow criterion in the application of the provisions would result in absurdity, injustice, impracticality or work against the objective of the Constitution, the Court should employ a purposeful or teleological approach or criterion that would meet the intention and objective of the Constitution. The purposive or teleological approach requires the Court not to remain fixated on the literal and narrow meaning of the words used in the Constitution or statute in the situations mentioned above in disregard of the intention or purpose of the provisions, but go on to give the words a meaning that accords with the purpose and intention behind the words.

There is no doubt that a literal and narrow construction of the word “shall” in Subsection (5) of S.162 as imposing a mandatory duty on the Federation to pay Local Government Councils allocation from the Federation Account, only through the States, would mean that the Federation must pay it to the States only. As the facts of this case has shown, such a literal application would work against the intention and purpose of the Constitution and create an unconstitutional status quo, unworkable and oppressive situations. To apply that word “shall” as making it mandatory for the Federation to pay Local Government allocations from the Federation Account through the States would make a constitutional provision prescribing the procedure to facilitate the enjoyment of a right created by the same Constitution to override and even extinguish the very right created by the Constitution, whose enjoyment it is meant to facilitate. For the above reasons, I think that a purposive and teleological application of that word would best meet the intention of the Constitution, accord with the smooth running of the system for payment of allocation from Federation Account to Local Government Councils. This is an application that would not exclude any other mode of paying allocation from the Federation Account to the Local Government Councils and giving discretion to the Federation to pay the allocations directly to the Local Government Councils or through States. The law is long settled that it is not always that the word “shall” in a statute is ordinarily literally read as mandatory and that in situations where such literal reading would defeat the intention of the statute and reading it as permissive or discretionary would meet the intention of the statute it would be read as permissive. See Amokeodo V IGP (1999) 6 NWLR (Pt.607)467 @ 481, Evong V Messrs Obono Obono & Ass. (2012) 6 NWLR (Pt. 1296) and Okorocha V UBA (2011) 1 NWLR (Pt.1228) 348. In this case it is glaring that giving the word “Shall” a literal meaning would defeat the objective of the Constitution, result in unconstitutionalities or illegalities or cause injustice or unworkable situations. It should be purposively read as permissive or discretionary. Therefore, I understand that word as permissive and imposing a discretionary and not mandatory duty. In the light of the foregoing, I hold that the Federation can pay Local Government allocations from the Federation Account to Local Government Councils directly or pay to them through States. In this case, since paying them through states has not worked, the justice of the case demands that the Local Government Council allocations from the Federation Account should henceforth be paid directly to the Local Government Councils.” Per AGIM, J.S.C.

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