Despite the Supreme Court judgement of July 11, 2024, granting financial autonomy to the country’s 774 local government areas, state governors across the federation are yet to abolish the controversial state/ LG joint accounts.

Consequently, the third tier of government still gets its federal allocation through the joint account as against the direct payment ordered by the apex court.

However, investigations conducted by LEADERSHIP Weekend in the nation’s six geopolitical zones showed that most state governments have initiated moves to obey the Supreme Court judgement.

While some state governors have directed their LG chairmen to activate their treasury system to implement the ruling, others have adopted what they described as “guided implementation,” citing the councils’ lack of capacity to go full swing.

A top LG administrator in one of the North Central states told LEADERSHIP Weekend that the local governments have been given three months to perfect certain account documents before they can receive direct allocations.

He said, “We have been given a grace period of three months to link the local government accounts with the National Identification Number (NIN) and the Treasury Single Account (TSA). After meeting these criteria, we can get our allocations directly from the federation account. In July, we received our allocations through the state/LG Joint Account.”

He added that the local governments are ready to utilise the autonomy granted them.
In Kwara State, the problem of local government administration started in the administrations of President Muhammadu Buhari and former Governor Abdulfattah Ahmed when there were zero allocations to both the states and local government areas.
During that period the local government areas could not even pay staff salaries in full, not to talk of executing any developmental projects.

But when the administration of the incumbent Governor AbdulRahman AbdulRazaq came on board in 2019, it injected life into the local government administration.

The AbdulRazaq administration not only cleared the backlog of salaries owed local government staff by the former administration, but also ensured the regular payment of their salaries in full.
However, the government’s inability to conduct local government elections since 2019 due to legal obstacles was a major setback for the local government administration in the state, as it was administered by unelected officials who were not accountable to the people.

LEADERSHIP Weekend observed that the local government areas in the state have structures that could aid good governance at that level and support the autonomy recently granted to them.

The local government areas have their respective secretariats: administration, works, finance, and health departments.

The chairman of Kwara State Local Government Service Commission, Alhaji Umar Shero, said the local governments are fully prepared for autonomy, adding that “this is what they have been longing for.”

On structures, Shero said the local government areas have their secretariats and various units and departments just like the state governments.

He said the legislative arm of government will oversee the financial activities of the local government administrations at that level and by the Office of the Local Government Auditor General.
In an interview with LEADERSHIP Weekend, an assistant chief planning officer of the Kano State Ministry of Local Government Affairs Garba Bello said the state is prepared for the financial autonomy of the LGAs.
He said the state has put financial memoranda on the ground for financial regulation to ensure checks and balances.

According to him, the memoranda spelt out how expenditure should be incurred or spent, with limits for local government chairman’s expenditure not exceeding N500,000. Where it exceeds, the councillors would have to give their approval.

The Ekiti State government has said there is no cause for concern over the financial autonomy recently granted to the local government.

The commissioner for local government affairs, Chief Folorunso Olabode, told LEADERSHIP Weekend in Ado Ekiti that the councils had always been autonomous.

Olabode said, “We don’t have issues with financial autonomy. The local government areas in Ekiti state are autonomous in terms of their finances.

“The governor has nothing to do with it, and due process is always followed in their spending”.

He said the state was recently commended by the national leadership of the Nigeria Union of Local Government Employees for its openness in managing and administering local government.

All 774 Councils Are Prepared For Financial Autonomy – ALGON President

Meanwhile, the national president of the Association of Local Government of Nigeria (ALGON), Aminu Muazu Maifata, has declared that the 774 LGAs in the country are prepared for full autonomy granted by the Supreme Court.

He said the issue of autonomy is not new to the councils; it existed before its eventual breach.

According to him, shortly after the judgement, the association’s National Executive Council (NEC) met in Nasarawa State in July to brainstorm on strategies ahead of implementing the verdict.

“We are fully aware of the responsibility and the weight of our mandate as spelt out in the constitution, and I can assure you that the third tier of government is prepared and ready for the independent it has consistently clamoured for and got.

“And one thing we have going for us is the calibre of persons manning the councils as executive chairmen. They are persons who have vast experience in their various fields and left legacies of service where they previously worked, be it in public and private sector. So, they are ready to bring these experiences to bear now that there will be no meddlesomeness in their activities,” he assured.

He said the chairmen during the NEC vowed to prove skeptics wrong by working assiduously to transform the grassroots while efficiently using resources that will come their way.

On whether there are strong structure at the councils to leverage on, he explained that ALGON as a body is initiating capacity building for all actors and stakeholders to drive the process, beginning from the legislative arms and civil servants.

“Beyond that, the Revenue Mobilisation Allocation and Fiscal Commission displays our allocations on their website. Given that situation, we must ensure that every kobo is accounted for,” he said.

The Federal Government has paid workers of the moribund Ajaokuta Steel Company the total sum of N38.9bn as salaries and allowances in 10 years, Saturday PUNCH reports.

This is despite the inability of the company to produce a single sheet of steel since its inception.

The Ajaokuta Integrated Steel Complex, conceived in 1979, was developed to establish a Metallurgical Process Plant alongside an Engineering Complex and various auxiliary facilities.

The complex is meant to generate important upstream and downstream industrial and economic activities that are critical to the diversification of the economy into an industrial one.

On its website, the company said it directly employed about 10,000 workers at the first phase of commissioning while the upstream and downstream industries that would evolve all over the nation would engage no fewer than 500,000 employees.

Ajaokuta Steel Plant, aptly known as the Bedrock of Nigeria’s industrialisation, is more than just a rolling mill—it’s an Integrated Iron and Steel Plant.

It boasts four distinct rolling mills: the Billet Mill, the Light Section Mill, the Wire Rod Mill, and the Medium Section and Structural Mill.

The plant utilises blast furnace technology, which is the most prevalent method for steel production, representing about 70 per cent of global liquid steel production.

By 1994, the plant was estimated to be 98 per cent complete in terms of equipment installation.

While some units of the plant were operational at various times, 40 out of the 43 planned units had been constructed.

However, due to mismanagement, the project remains incomplete over 45 years later.

At the Russia-Africa Summit in 2019, former President Muhammadu Buhari and Russian President Vladimir Putin agreed on a revitalisation of the steel mill with Russian support and project funding from the Afreximbank and the Russian Export Centre.

But it was delayed due to the COVID-19 pandemic and the agreement was abandoned.

In January 2024, Tinubu opened discussions with a Chinese steel company, Luan Steel Holding Group, to revive the Ajaokuta Steel Company.

That discussion has not yielded any results.

Despite its inactive status and reports of an ineffective workforce, the company continues to receive substantial annual budget allocations from the government.

Furthermore, the salaries of its employees are still accounted for in the government’s annual budget.

A breakdown of the company’s annual budget between 2014 and 2024 showed that it paid a total of N29.11bn in salaries and wages, and N9.8bn in allowances to its staff.

Further analysis revealed that the government disbursed N3.82bn for personnel costs in 2014, reduced marginally to N3.8bn in 2015, N3.55bn in 2016 and N3.84bn in 2017.

In 2018, an unverifiable number of workers at the company received a total sum of N3.76bn for salaries and allowances, N3.2bn in 2019, and N3.5bn in 2020.

The cost increased to N3.89bn in 2021, and N3.94bn in 2022 but dropped significantly to N1.22bn in 2023.

The company didn’t announce any retrenchment exercise during this period. The cost, however, increased by N3.07bn to N4.29bn in 2024.

At an investigative hearing recently, the lawmaker representing Kogi Central, Senator Natasha Akpoti-Uduaghan, took up the Sole Administrator of the Steel Company, Summaila Akaba, on several workers collecting salaries from the N4.2bn appropriated for personnel costs in the 2024 budget.

She said being an indigene of the area and desirous to get the steel company revamped and working, she made unscheduled visits to it and hardly found 10 people.

The lawmaker lamented further that despite spending money on personnel costs, no steel had been manufactured and no mill rolled.

She said, “The sum of N4.2bn was appropriated for personnel cost in 2024, but from several visitations I’ve made to the complex, hardly were 10 people sighted to be around or doing anything.

“So, who are the workers collecting monthly salaries from the appropriated N4.2bn?”

In the 2024 budget, the National Assembly increased budgetary allocation from N4.45bn in the proposed 2024 budget to N5.18bn in the approved version for the dormant Ajaokuta Steel Company.

This is an increase of N730m as the Federal Government plans to revive the moribund steel plant, which has been dormant for over 42 years.

At a briefing three months ago, the Minister of Steel Development, Shuaibu Audu, stated that the government was at an advanced stage of raising more than N35bn required to restart the Light Mill Section of the Ajaokuta Steel Company.

He also said data on technical analysis and evaluation by experts indicated that the government required between $2bn and $5bn to revive the Ajaokuta steel company within three years.

However, experts insisted that the best option was to privatise the company for effective maximisation of its potential.

Waste of resources – Economist

Reacting to the payment of workers, an economist and researcher, Paul Alaje, said it amounted to a waste of the country’s resources, calling for a public-private partnership to revamp the company.

Alaje, who is the chief economist at an economic development research firm in Lagos, SPM Professionals, said, “It is wastage. But the truth is that labour has to be paid. It is not their fault that the place isn’t working. It is the government that doesn’t have work to give them.

“It is the work of the employer to provide what labour will do. But when the employer is laid back, there is an issue.

“That is why the Federal Government needs to engage in public-private partnership immediately or allow the foreigners who started the projects to partner with the Federal Government for the completion of the Ajaokuta steel mill.

“The billions of naira spent were not just in Ajaokuta, I imagine they are spending tens of billions to pay salaries in four refineries that are not working. How can you pay people for not working?

“We lose hundreds of millions of naira at different offices of government to people not working. It is not that they don’t want to work, but there is no work for them to do.

“I will not support a total disposal of the Ajaokuta steel mill. I will support a situation where we partner with the private sector. We can do 60-40, or partner with the foreign company that started it.

“The best thing to do is to move the workers at the company to agencies in need of workers, but that will also mean that there are no more eyes on Ajaokuta steel mill.  Some of the fixed equipment will disappear overnight. Why can’t we make it work? Some people are in the steel business in Nigeria. Can’t we give part of the shares to them?”

Speaking with Saturday PUNCH, a professor of Economics at Obafemi Awolowo University, Osun State, Abayomi Adebayo, said paying such an amount would translate to throwing the country’s scarce resources into the drain.

He added that the Federal Government should rather terminate the workers’ appointments and stop paying them salaries for work not done.

He said, “Anytime you are paying a worker that is not producing anything, you are throwing your money into the drain. It’s simply a drain on the Nigerian economy and a manifestation of absurdity in governance because if you know that the place is not functioning, why not terminate the appointment of the workers there?

“They have to rationalise the staff. You can’t continue to pay people who are not working because so many issues about that job are not yet resolved. I can’t understand why somebody will continue to pay like that.

“It’s a show of irresponsibility. It’s a show of the fact that they don’t have the love of Nigeria at heart and some of the workers would have found their way out of the country and be working elsewhere. It shows how much we love our country.”

… Refutes Dangote’s Weak Enforcement Claim

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has refuted claims by the Dangote Petroleum Refinery and Petrochemicals and other players in the industry that it has been weak in the enforcement of the Domestic Crude Supply Obligation (DCSO) to local refineries.

The NUPRC took the position following revelations that it has facilitated the supply of over 32 million barrels of crude oil to the Dangote Refinery and other refineries despite the country’s weak oil output.

The NUPRC made the disclosure in a statement on Friday which was obtained by THE WHSTLER.

THE WHISTLER reported that Dangote group chief commercial officer, Rabiu Umar had claimed that the NNPC supplies only 33 per cent of crude to the Dangote Refinery. He had claimed that the refinery sources the remaining 67 per cent elsewhere.

Despite NUPRC’s efforts to enforce the crude oil obligations through the development of the Domestic Crude Supply Obligation (DCSO) framework, the Dangote Refinery also accused the NUPRC of weak enforcement of the DCSO in a letter which was obtained by THE WHISTLER.

The firm, however, retracted the claim in another statement signed by the Group Chief Branding and Communications Officer, Anthony Chiejina.

Chiejina said, “Our attention has been drawn to media reports alleging that the Dangote Refinery has backtracked by acknowledging that NNPC supplied about 60 per cent of the 50 million barrels we lifted.

“To clarify, we have never accused NNPC of not supplying us with crude. Our concern has always been that NUPRC is pushing but IOCs are not following the instructions to enforce the domestic crude supply obligation and ensure that we receive our full crude requirement from NNPC and the IOCs.”

Meanwhile, an earlier letter issued by the Dangote Refinery to the Commission Chief Executive (NUPRC) Gbenga Komolafe, dated July 24, 2024, commended the regulator for its enforcement of the DCSO.

“Let me once again commend you and your team for the successful development of the domestic crude supply obligation (DCSO) framework. This framework will lay the foundation for ensuring a stable and reliable supply of crude oil to local refineries,” the Chairman of Dangote Refinery, Aliko Dangote said in the letter.

But the regulator said that to ensure the enforcement of Section 109 of the Petroleum Industry Act, 2021, it has developed and gazette regulation of the Production Curtailment and Domestic Crude Oil Supply Obligation (DSO) Regulation 2023.

The regulator said it took an additional step to ensure that crude producers furnish the Commission with copies of all crude oil sales and purchase agreements entered or any security interest entered, that is tied to crude oil production.

“For effective implementation of the DCSO, the NUPRC established a working committee comprising of NUPRC, Oil Producers Trade Section (OPTS), the Independent Petroleum Producers Group (IPPG), Crude Oil Refinery-Owners Association of Nigeria (CORAN) and NUIMS. The NUPRC has facilitated domestic supply of crude oil to Dangote Refinery and other Refiners using the monthly Production curtailment platform.

“These strategic commitments to Nigeria’s energy security have led to the facilitation of the supply of 32 million barrels of crude to Dangote Refinery and other local producers in the first half of 2024,” NUPRC said.

A breakdown showed that nine refineries have benefitted from the 32,088,122 barrels of crude as Dangote alone enjoyed 29,047,098 barrels out of the total supply between January to June 2024.

The Warri Refinery received 949,670 barrels; NDPR-NDPR Refinery got 823,395 barrels of crude; the Port Harcourt Refinery received 471,123 barrels; Seplat-WPSOL Refinery was allocated 419,541 barrels while Waltersmith-WSPOL Refinery got 296,353 barrels.

According to the NUPRC, other beneficiaries were Edo Refinery that got 58,504 barrels of crude and Du-port Refinery that was supplied 22,438 barrels of crude.

The NUPRC said that the IOCs have also explained that they have pledged crude to their financiers, adding that the “whole transaction is guided by the ‘Doctrine of the Sanctity of Contracts’. The parties already agreed that the licensees would pay the cost of the development and they explained to the commission that most of the funding was provided by traders at a mutually agreed price.”

IOCs also highlighted some operational challenges on the part of refiners which the NUPRC as a regulator has consistently defended local refiners.

The regulator said that “In the pursuit of its mandate, if it becomes necessary for the NURC to withdraw licenses, the commission will do so but it will not resort to the ‘presumptuous and arbitrary’ withdrawal of licenses because of ‘Sanctity of Contract.’.

“However, the regulator as a subject matter expert is of the opinion that arbitrary revocation of licenses is not in the best interest of the country particularly in the era of low investment arising from the onslaught in energy transition.”

The NUPRC further gave Nigerians the opportunity to decide if extreme penal regulatory measures should be taken against IOCs.

NUPRC said, “While our dear President, Bola Ahmed Tinubu, has been vacating entry barriers to investment in oil and gas sector and introducing incentives to attract investments, it is now left for Nigerians to decide whether it is strategic for the NUPRC to apply ‘extreme penal regulatory measures’ in the enforcement of domestic supply obligations especially in the era of low investment, low production, low oil revenues and onslaught of energy transition with defunding of fossil fuel.”

A report released by the National Bureau of Statistics (NBS) on Friday indicated that the highest average Cost of Healthy Diet (CoHD) was recorded in the South West Zone at ₦1,545 per day, whereas the North West Zone reported the lowest average at ₦956 per day.

Naija News understands that the national average cost of maintaining a healthy diet for an adult has shown a consistent upward trend recently, reaching ₦1,241 per individual in June.

The NBS report shows that the cost of a healthy diet (CoHD) has risen by 19.2 per cent.

Since January of this year, the CoHD per adult has been on a steady increase, with figures of ₦1,041 in May, ₦1,035 in April, ₦982 in March, ₦938 in February, and ₦858 in January.

The NBS’s report on a healthy diet in June reads partly, “The National Average Cost of a Healthy Diet was ₦1,241 per adult per day in June 2024.

“At the State level, Ekiti, Ogun, and Osun states recorded the highest cost with ₦1,640, ₦1,599, and ₦1,557, respectively. Katsina, Kano and Jigawa accounted for the lowest costs, with ₦878, N926 and ₦937.

“At the zonal level, the average CoHD was highest in the South-West Zone at ₦1,545 per day, followed by the South-South zone with ₦1,376 per day.

“The lowest average Cost of a Healthy diet was recorded in the West Zone with ₦956 per day.

“The Cost of a Healthy Diet (CoHD) has been steadily rising over the past six (6) months, since January 2024.

“In June 2024, the CoHD was 45% higher than it was in January 2024 (₦858). It was also 19% higher than the cost in May 2024 (₦1,041). The main drivers of this increase in CoHD are vegetables, legumes, nuts and seeds, and starchy foods.”

NBS explained that CoHD is the least expensive combination of locally available items that meet globally consistent food-based dietary guidelines, used as a measure of physical and economic access to healthy diets.

“In recent months, the CoHD has risen faster than general inflation and food inflation.

“However, the CoHD and the food CPI are not directly comparable; the CoHD includes fewer items and is measured in Naira per day, while the food CPI is a weighted index,” said NBS.