Political Implications of State-Local Government Joint Account in Nigeria and the Way Forward

Abstract

The state-local government joint account system in Nigeria, instituted in 1999, has been a subject
of controversy and scrutiny due to its impact on the financial autonomy and effectiveness of local
governments. This paper critically examines the political implications of this fiscal arrangement
and proposes solutions for addressing the challenges it poses. Through a desk research
methodology, the study explores the historical context, conceptual framework, and practical
implications of the joint account system. It identifies key problems such as illegal deductions,
delays in allocation release, and diversion of funds, which undermine the ability of local
governments to fulfill their mandates. Despite its initial intentions to prevent manipulation, the
joint account system has failed to achieve its objectives and has become a tool for exploitation by
state governments. Based on the analysis, the paper recommends abolishing the joint account
system and instituting direct allocation of funds from the federation account to local governments.
Additionally, it advocates for enhanced oversight mechanisms, legal reforms, and capacity-
building initiatives to promote transparency, accountability, and efficiency in local government
administration.