The Economic and Financial Crimes Commission (EFCC) is investigating the 774 local government chairmen across Nigeria over their management and expenditure of public funds following the councils’ financial autonomy.

The investigation, being handled by the commission’s zonal directorates, is aimed at assessing the accountability of the chairmen and determining whether the financial independence granted to local governments has translated into improved service delivery and grassroots development.

Sources within the EFCC confirmed that the exercise was ongoing across the 36 states and the Federal Capital Territory, but said it was being conducted discreetly.

An official of a state Ministry of Local Government had earlier confirmed the development, disclosing that all local government chairmen in the state were being investigated over their spending.

“All the local government chairmen in the state are currently being probed by EFCC over their spending,” the official said.

An EFCC source, however, clarified that the investigation was not limited to any particular state but covered all local government areas nationwide.

The source said the commission was interested in determining whether the councils had demonstrated accountability and managerial competence since the Supreme Court judgment granting them financial autonomy.

“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,” the source said.

The source added that the commission would assess the impact of the autonomy on local economies, the management skills of council chairmen and their integrity.

“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,” the source added.

The probe comes more than two years after the Supreme Court affirmed the financial autonomy of Nigeria’s 774 local government areas and barred state governors from controlling or withholding funds allocated to the councils.

In May 2024, the Federal Government, through the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, approached the Supreme Court to challenge state governors’ control over local government allocations.

The suit sought to prevent governors from dissolving democratically elected councils and replacing them with caretaker committees, as well as stopping them from receiving and withholding funds meant for local governments.

Fagbemi argued that the 1999 Constitution provided for democratically elected local government councils and did not recognise caretaker committees as substitutes for elected administrations.

On July 11, 2024, the Supreme Court, in a landmark judgment, ruled in favour of local government financial autonomy, declaring it unconstitutional for state governors to control or withhold allocations meant for the councils.

The seven-member panel, led by Justice Garba Lawal, also directed the Accountant-General of the Federation to pay allocations directly into local government accounts.

The judgment was expected to strengthen grassroots governance by allowing elected council officials to independently manage their finances and execute development projects without interference from state governments.

However, concerns over accountability and the management of the funds prompted the EFCC to announce plans to monitor local government expenditure.

In October 2024, EFCC Chairman, Ola Olukoyede, said the commission would monitor the budget performance of all local governments to ensure that allocations were used for approved projects and programmes.

Olukoyede, who spoke in an interview published in the commission’s magazine, said the agency would work with relevant stakeholders to track council expenditure and prosecute officials found to have violated the law.

He also identified the establishment of additional zonal directorates as part of efforts to strengthen the commission’s nationwide presence and improve its capacity to monitor public funds.

“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,” he said.

He added, “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.”