Dr. Musa Babayo, Chairman of the Board of the Federal Roads Maintenance Agency (FERMA), has called on Nigerians to demand accountability from state governors and local government chairmen regarding the increased funds received following the removal of the petrol subsidy.
Babayo stated that states and local governments have received trillions of naira in additional allocations since President Bola Tinubu’s decision to end the subsidy regime. He argued that while the federal government took the step to save the national economy from collapse, the resulting financial windfall must be utilised for the benefit of the people at the grassroots.
The FERMA boss backed the president’s policy, asserting that the removal of the subsidy was necessary to redirect resources toward infrastructure and social services. However, he maintained that the burden of demonstrating the impact of these funds now lies with the sub-national administrations.
Since the removal of the petrol subsidy in May 2023, the Federation Account Allocation Committee (FAAC) has distributed significantly higher monthly sums to state governments. These funds, which previously went to oil marketers to keep fuel prices artificially low, are now shared among the three tiers of government. This has provided states with a substantial increase in their monthly revenue streams.
FAAC Allocations and Local Government Funding
The call for accountability comes amid ongoing concerns over how state governments manage these increased allocations while many Nigerians continue to struggle with high inflation and the rising cost of living. Babayo specifically urged citizens to question their leaders on the additional resources accruing to states and local governments to ensure they are not diverted.
This demand for transparency aligns with recent legal developments in Nigeria. In July 2024, the Supreme Court of Nigeria delivered a landmark judgment granting financial autonomy to local governments. The ruling mandated that federal allocations be paid directly to local government accounts, reducing the control state governors previously exercised over these funds.
The autonomy ruling means that local government chairmen can no longer shield their spending behind state-level administration. With direct access to these trillions in additional allocations, the responsibility for local infrastructure, healthcare, and primary education now rests solely with the local councils.
Critics of the current administration have frequently pointed to the slow implementation of palliatives meant to cushion the effect of the fuel price hike. By shifting the focus to the states and local governments, Babayo is highlighting a gap between the federal government’s revenue gains and the actual delivery of services to the Nigerian public.
The Federal Government continues to monitor the impact of the subsidy removal on the national economy, while civil society organisations have called for a detailed audit of the FAAC disbursements to ensure the funds are used for genuine development projects.
The issue remains a point of contention as several state governments have attributed their inability to provide adequate palliatives to other economic pressures, despite the increased monthly inflows from the federation account.
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