Posted Mon, Aug 5, 2024 2:31 PM

FINANCIAL AUTONOMY: EXAMINING THE FUNCTIONS OF LOCAL GOVERNMENT COUNCILS UNDER THE CONSTITUTION OF THE FEDERAL REPUBLIC OF NIGERIA, 1999 (AS AMENDED)

In the governance structure, local governments are often seen as the closest link between government and its citizens, acting as the primary interface for essential public services. Section 7 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) guarantees the existence of the local government. It prescribes the structure, composition, finance and functions of local government councils. However, their effectiveness hinges significantly on one crucial factor: financial autonomy. The financial autonomy of local governments is more of a myth than a reality in Nigeria. It is anticipated that the recent Supreme Court judgement in the case brought by the Attorney General of the Federation against the 36 states of Nigeria will reinforce the principles of true fiscal federalism, which emphasises that power and resources should be equitably distributed across various government levels, to ensure that governance is both efficient and effective. The Supreme Court in its judgement of Thursday, 11th July 2024 in AG Federation v AG Abia State and Ors decided that the LGAs can now directly receive their allocations from the federation account.

Going by the functions of the local government set out in the fourth schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), it becomes evident that the local government councils were typically created to be responsive, accountable and serve as engines of economic growth and social development. To examine how the various functions of the local government contribute to economic growth at the grassroots and national levels, each provision will be analysed in the context of local government financial autonomy.

Functions:

1. Consideration and making of recommendations to State commission on economic planning or similar body: Paragraph 1(a) of the fourth schedule to the 1999 Constitution underscores the role of local governments in contributing to economic development within their jurisdictions. Local governments are tasked with making recommendations to the State Commission on Economic Planning regarding the state's economic growth, particularly in areas where the council and the state intersect. This responsibility necessitates local governments having the financial capacity to contribute meaningfully to such discussions and initiatives as they are positioned to understand better local needs and priorities, such as investing in infrastructure projects, supporting local businesses, and promoting employment opportunities tailored to local conditions. This can lead to effective and responsive economic planning, ultimately contributing to overall economic growth.
2. Collection of rates, radio and television licenses: Paragraph 1(b) of the fourth schedule to the 1999 Constitution provides that local governments are responsible for collecting rates and fees such as radio and television licenses. Effective collection and management of these revenues require financial autonomy, enabling local governments to design and implement efficient collection systems. This will further enable local governments to fund their operations and deliver essential services without undue reliance on state or federal allocations. Efficient revenue collection and management leads to development in rural areas and more so, ensuring fiscal discipline and accountability at the local level.
3. Establishment and maintenance of cemeteries, burial grounds, and homes for the destitute or infirm: Paragraph 1(c) of the fourth schedule to the 1999 Constitution provides for the establishment and maintenance of cemeteries, burial grounds, and homes for the destitute or infirm are also listed as part of the functions of local government. Local governments can now  allocate resources adequately and maintain these services without undue delay or dependency on state allocations. By extension, their functions could include improving healthcare facilities, providing social housing, and ensuring dignified burials, thereby enhancing the quality of life for residents and promoting social stability.
4. Licensing of bicycles, trucks (other than mechanically propelled trucks), canoes, wheel barrows, and carts: Paragraph 1(d) of the fourth schedule to the 1999 Constitution places the responsibility of licensing non-mechanically propelled vehicles like bicycles, canoes, wheelbarrows, and carts falls within the purview of local governments. Licensing fees generated from these modes of transportation and equipment represent a potential revenue source for local governments. While the revenue generated from these facets can be reinvested into transportation infrastructure, improving mobility and facilitating trade and commerce at the local level, the administrators must ease the licensing framework to ensure citizens are adequately served.  
5. Establishment, maintenance, and regulation of slaughterhouses, slaughter slabs, markets, motor parks, and public conveniences: Going by the provisions of paragraph 1(e) of the fourth schedule to the 1999 Constitution, local governments play a crucial role in regulating public amenities and markets to ensure health, safety, and environmental standards. With financial autonomy, local governments will be better positioned to invest in modernising facilities, enforcing regulations, and improving sanitation standards. This will improve  public health outcomes, attract investment in local markets, and promote tourism and trade activities. Strengthening these sectors can lead to economic growth by creating a conducive environment for business activities and improving the overall quality of life for residents.
6. Construction and Maintenance of Roads, Streets, and Public Highways

Paragraph 1 (f) of the fourth schedule to the 1999 Constitution empowers LGAs to construct and maintain roads, streets, street lighting, drains, parks, gardens, open spaces, and other public facilities as the House of Assembly of a State prescribes.

LGAs can prioritise and execute these infrastructural projects without the delays typically caused by state-level bureaucracy. Direct access to funds will enable timely and efficient completion of projects, ensuring that roads, streets, and other public highways are well-constructed and maintained. Enhanced infrastructure will facilitate smoother logistics and transportation, boosting local commerce and economic activities.

       7. Naming of Roads and Streets and Numbering of Houses

Paragraph 1 (g) of the fourth schedule to the 1999 Constitution empowers Local Government Areas (LGAs) to name roads and streets and the numbering of houses. LGAs can efficiently manage rural and urban planning activities, crucial for navigation, delivery services, and emergency response. We can compare the system to the UK, where local councils manage street naming and numbering, supporting effective urban management. Also, the local councils can ensure that naming conventions reflect local heritage and preferences, fostering a sense of community identity. This local control over urban planning can significantly enhance the functionality of towns and cities, contributing to a more organised and cohesive environment.

      8. Provision and Maintenance of Public Conveniences, Sewage, and Refuse Disposal

Paragraph 1 (h) of the fourth schedule to the 1999 Constitution mandates LGAs to provide and maintain public conveniences, sewage, and refuse disposal services.

Waste disposal has been a concern in Nigeria and while the states have been managing this through their various Waste Management Agencies, there has been little improvement. It is crucial for LGAs to recognise their role and invest in and improve sanitation services, leading to healthier and cleaner communities. A decentralised approach to sanitation services, where local authorities have significant control, has resulted in high public health standards and environmental sustainability in developed countries. Efficient sewage and waste management reduce the incidence of communicable diseases, improving public health outcomes. Financial autonomy would provide LGAs access to resources for implementation of sustainable waste management practices, such as recycling programmes.  These improvements can significantly enhance the quality of life for residents.

      9. Registration of Births, Deaths, and Marriages

Paragraph 1 (I) of the fourth schedule to the 1999 Constitution includes the responsibility of LGAs to register births, deaths, and marriages.

The LGAs would now be better positioned to document births, deaths and marriages which would support effective governance and planning. Reliable registration data is crucial for demographic planning, resource allocation, and the provision of social services. Proper registration supports individual access to services, such as education and healthcare and there is no better authority to handle this than the grassroot government. With this, key government bodies including the Nigeria Population Commission and Nigerian Bureau of Statistics should be able to obtain reliable data to drive growth and development.

    10. Assessment and Levying of Rates on Privately Owned Houses or Tenements

Paragraph 1 (j) of the fourth schedule to the 1999 Constitution permits LGAs to assess privately owned houses or tenements for the purpose of levying rates.

This would enable the LGAs to effectively assess and levy property rates and increase their revenue base. Increased revenue would enable LGAs to fund local development projects. A stable revenue stream from property rates supports consistent funding for essential services and infrastructure, promoting long-term economic stability and growth. LGAs independence would empower them to make strategic investments that can lead to local economic development and improve the quality of life for residents.

     11. Regulatory and Control Functions of Local Governments

Paragraph 1(K) provides for the functions of Local Governments to include control and regulation of:

1. out-door advertising and hoarding;
2. movement and keeping of pets of all description;
3. shops and kiosks;
4. restaurants, bakeries and other places for sale of food to public
5. laundries; and
6. licensing, regulations and control of the sale of liquor.

Effective regulation and control of the above items would promote public well-being, ensure public safety, and maintain an orderly community, further enhancing development. The availability of financial resources at the Local Government level would also ensure safe food for all and prevent health hazards.

LGAs' Licensing and regulatory functions can generate revenue through fees and taxes. The funds generated can be used to improve infrastructural development and community services. It is worthy of note that LGAs, in exercising their powers, must enable the ease of doing business to foster business growth.

Paragraph 2 of the Fourth Schedule of the Constitution of the Federal Republic of Nigeria, 1999, provides additional functions for Local Government Councils, which include the participation of such council in the Government of a State concerning the following matters:

    12. Provision and maintenance of primary, adult and vocational education;

In 2023, UNICEF reported that 75% of children aged 7-14 lack basic literacy and numeracy skills. Local Government Councils play a significant role in improving education, and the availability of resources at the third tier of government can be deployed to promote literacy and numeracy, train teachers, and provide adult education to advance educational development.

    13. Development of agriculture and natural resources, other than the exploitation of minerals;

A joint news release by Cadre Harmonisé covering 26 states and the FCT and published by the United Nations Office for Humanitarian Affairs (UNOCHA) reveals that 26.5 million Nigerians are projected to be food insecure in 2024. Local Government Councils have a significant role to play in addressing food insecurity by promoting good agricultural practices at the grass-roots level and eliminating the factors that hinder the food value chain from farm to fork. Available financial resources at LGAs will ensure the provision of the necessary tools to improve agricultural growth and development.

     14. Provision and maintenance of health services;

Primary healthcare has become a significant concern globally as a result of the global pandemic and the recent epidemics that occur in vulnerable communities. Citizens are often left vulnerable due to the lack of healthcare infrastructure, the non-availability of healthcare workers, and the poor conditions of their environment. Local Government Councils can strengthen healthcare services in their communities through effective collaboration with state government, utilisation of resources to meet the specific needs of the community, and training of healthcare workers, among other things.

• such other functions as may be conferred on a local government council by the House of Assembly of the State.

It is important to mention that Local Government Councils must collaborate with State governments to achieve the functions listed in Paragraph 2(a) to (d) of the fourth schedule to the Constitution.

Also, adequate frameworks that enable the ease of doing business, promote citizens well-being and the enhancement of economic growth and development must be put in place. LGAs should collaborate with State Governments to streamline bureaucratic bottlenecks and encourage economic growth and prosperity.

Authors:

William Umoh

Khadijat Akewushola

Nsikan Essien