…Says 7% GDP Growth Needed To Alleviate Poverty
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has linked the delay in complying with the Supreme Court judgment on direct disbursement of funds in the Federation Account to local governments to structural issues but assured that the Federal Government is working towards the full implementation of the apex court ruling.
Edun, who gave the assurance in his address at the Agora Policy Conversation event on Tuesday, said that while the Federal Government respected the landmark ruling affirming the financial independence of local governments, translating policy into practice required sundry institutional adjustments.
The minister recalled that the Supreme Court had made two key judgments, namely that only democratically elected local governments should receive allocations from the Federation Account; and that such allocations must be paid directly to the local governments.
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According to him, while the first ruling has been enforced the second is still being processed such that while modifying these legacy arrangements will not disrupt critical services.
He clarified: “Direct transfers to local governments are a work in progress. It is not as simple as flicking a switch. There are embedded structures, such as those for primary healthcare and basic education, that currently operate under state supervision, and these require reconfiguration before direct funding can happen effectively.
“You need a serious tinkering of the existing funding architecture to allow local governments to receive and manage allocations directly. In a democracy, the rule of law is paramount. The Supreme Court has ruled. It is the duty and obligation of the Federal Government to implement it”, the minister added.
He harped on the strategic role of local governments in the implementation of the current administration’s Renewed Hope Agenda, pointing out that meaningful grassroots development could only occur if councils were empowered to manage their own resources.
Edun maintained that to lift millions of Nigerians out of poverty, such efforts must start from the grassroots and that the local governments must be engines of development.
On the administration’s reform agenda, the minister said that the reform had laid the foundation for macroeconomic stability through difficult but necessary adjustments, stressing that “the first phase removed major distortions, such as the petrol subsidy and the managed exchange rate system. Now we are entering the second phase — stabilising inflation, increasing reserves, reducing the fiscal deficit, and boosting revenue.”
Edun, who cited the just published data by the National Bureau of Statistics (NBS) which indicated that Nigeria’s economy grew by 3.4 per cent in the first quarter of 2025 to justify his claims on the improved performance of the nation’s economy, however, noted that the growth rate was just half of the administration’s target.
He said: “For real impact, particularly on the poor and vulnerable, the economy needs to grow at around 7 per cent annually. Autonomy isn’t just a legal issue; it’s a development necessity.”
The minister also disclosed that the Federal Government was pursuing multiple initiatives to strengthen local governance structures, including a national nutrition programme across all 774 local government areas and the Local Government Connectivity Project to improve digital access as better connectivity would enhance access to markets, education, and healthcare services, and ultimately support inclusive growth.
Earlier in his remarks, the Executive Chairman of the Fiscal Responsibility Commission, Barr. Victor Muruako, charged the local governments to “preface the implementation of their autonomy with clear commitments to fiscal transparency, accountability, and prudence.”
He cautioned that while fiscal independence would allow LGAs to seek development financing from banks and institutions, their borrowings must comply strictly with the Fiscal Responsibility Act to avoid unsustainable debt accumulation.
Muruako stressed: “Autonomy should not be mistaken for institutional independence without accountability. The goal is to improve service delivery and human development at the community level.”
