The Federal Government is working to fully implement the Supreme Court’s ruling on local government autonomy, but structural challenges continue to hinder direct fund transfers, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy.

Speaking at the Agora Policy Conversation in Abuja on Tuesday, Edun affirmed the government’s commitment to the court’s decision, which guarantees financial independence for Nigeria’s 774 local government areas. However, he noted that putting the ruling into effect requires major institutional reforms.

He explained that the Supreme Court made two key declarations: only democratically elected local governments are eligible for Federation Account allocations, and such funds must be paid directly to them.

While the first has been implemented — with appointed councils barred from receiving funds — efforts to enable direct payments are still underway.

“Direct transfers to local governments are a work in progress,” Edun said.

“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.”

He noted that the main challenge now is reforming long-standing institutional arrangements without disrupting essential public services.

“You need a serious tinkering of the existing funding architecture to allow local governments to receive and manage allocations directly,” he added.

The minister stressed that the Federal Government remains committed to upholding the rule of law and will ensure full implementation of the Supreme Court’s ruling.

“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,” Edun noted.

He underscored the strategic importance of local governments in advancing President Bola Tinubu’s Renewed Hope Agenda, noting that genuine grassroots development depends on empowering councils to control and manage their own resources.

“To lift millions of Nigerians out of poverty, we must start from the grassroots. Local governments must be engines of development,” Edun said.

He explained that President Tinubu’s reform agenda had already established the groundwork for macroeconomic stability by implementing tough but essential policy adjustments.

“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,” he added.