Chapter 2: The Market Tax

Poster Line: "The governor takes 70% of your LGA's money and calls it 'coordination.'"

The Story

It is the first Monday of September. The quarterly FAAC disbursement has just hit the state account. In Asaba, Delta State, an LGA chairman sits in his office and waits for the alert. His LGA is entitled to N387 million for the quarter. That is N129 million per month. In a country where a bag of cement costs N12,000, that money could buy 32,250 bags. Enough to build 40 kilometres of concrete drains. Or 15 new classroom blocks. Or 3 primary health centres with full equipment. The alert comes. But the figure is wrong. Instead of N387 million, the chairman sees N97 million credited to the LGA's operating account.

He calls the state accountant. The man reads the deductions like a grocery list compiled without his consent. N116 million for "state administrative coordination." N87 million for "joint infrastructure projects" managed by the Ministry of Works. N58 million for "security votes, local government share." N29 million for "other statutory deductions." N97 million remains. His LGA has 10 wards. That is N9.7 million per ward for the entire quarter. Salaries alone for the 127 staff on the LGA payroll cost N68 million per quarter. He is already N29 million in deficit before he has bought a single bag of cement, cleared a single drain, or purchased a single bottle of paracetamol for the ward PHC.

He picks up his phone and calls the councillor for Ward 7, the man who has been begging him to fix the bridge that collapses every rainy season. "Oga, the money no reach," he says. The sentence tastes like ash in his mouth. He has said it 11 times in three years. He has never once been able to explain where the other three-quarters of the money went. The state Joint Account committee does not publish its minutes. It does not hold public hearings. It meets in the Government House, and the governor signs the deductions.

Meanwhile, a market trader in Oshodi pays between N700 and N2,500 daily in multiple levies. Morning tickets, Babaloja fees, KAI charges, environmental fees. No receipts. No accountability. No connection to services. She pays N200 every Thursday for "environmental fees." The gutter in front of her stall has not been cleared in three years. She pays N100 every morning for a ticket authorizing her to trade. The market has no public toilet. She pays N200 to KAI every Friday for "sanitation." The refuse heap at the market entrance has grown so large it has become a local landmark. She is paying for services she never receives. The gap between what is collected and what is delivered has a name: diversion.

This is a fictionalized illustration based on documented Joint Account deduction patterns across Delta, Akwa Ibom, Lagos, and Niger States.

The Fact

Every month, your LGA's FAAC allocation lands in a state-controlled account before your chairman can touch it. The governor controls that account. He deducts what he wants. He calls it "coordination." It is theft, pure and simple. According to estimates reported by The Liberalist, governors diverted N23.14 trillion from LGAs over 16 years through this mechanism. N23.14 trillion. That is approximately N30 million per LGA per year. Your drain is blocked because your governor bought a new official fleet. Your clinic has no drugs because your governor built a new Government House wing. Your market has no toilet because your governor's "coordination fee" consumed the sanitation budget. And the problem is not just historical. Between July 2024 and December 2025, N7.43 trillion intended for LGAs was still routed through state-controlled structures. This was after the Supreme Court of Nigeria explicitly ordered them to stop. The governors did not merely defy the Court. They accelerated the theft. They treated the highest court in the land like a suggestion box.

The Federation Account Allocation Committee formula is precise. LGAs are allocated 20.60% of all distributable revenue. VAT adds another 35% to the LGA share. In 2023, LGAs collectively received over N4.5 trillion. In just the first 11 months of 2025, that figure rose to N4.9 trillion. In January 2025 alone, one single month, N361.75 billion in LGA allocations was routed through state accounts. The money is released from Abuja every month like clockwork. It just never reaches your LGA. It stops at the Government House, where the governor takes his cut, and what remains dribbles down to a chairman who cannot pave a road or stock a clinic with what is left.

An academic paper published in Walsh Medical Media documented what happened during former Governor Chimaroke Nnamani's administration in Enugu State. Local government councils were, quote, "made to smell hell in delivering developmental services." Council chairmen were, quote, "forcefully made to sign prepared claims" while being denied their full statutory allocations. They signed under duress. The money left the Joint Account for purposes they could not verify. And the citizens of Enugu's 17 LGAs watched their roads crumble, their clinics empty, and their drains clog while the money that should have fixed them went elsewhere. This was not an isolated case. In Niger State, a Financial Management Committee review found that over N70 billion was withdrawn from two Government House bank accounts between 2007 and 2015. N2.86 billion could not be accounted for. N613 million was spent on "ghost vehicles" that existed only on paper. In Akwa Ibom, academic research confirmed that state officials "siphoned" LGA funds under the pretext of carrying out projects that were never completed, never started, or never existed.

While governors steal what the federal government sends, many LGAs cannot even help themselves. All 25 LGAs in Delta State generated zero naira in internal revenue in 2023. Not one naira. Complete fiscal paralysis. Why would an LGA work hard to collect market levies when the governor will absorb the proceeds into the Joint Account anyway? Why invest in revenue staff when the money they collect disappears into state ministry overhead? And across Nigeria, only 10 of 36 states publish LGA budgets. Twenty states, including Lagos, Rivers, and Delta, publish nothing at all. If you cannot see the budget, you cannot track the spending. If you cannot track the spending, you cannot hold anyone accountable. The Power Hider thrives in that darkness.

On July 11, 2024, the Supreme Court delivered its landmark judgment. Seven justices. Unanimous. Delivered by Justice Emmanuel Agim. They declared the State Joint Local Government Account unconstitutional. They ordered five critical things. Direct payment to LGAs, bypassing the Joint Account entirely. Caretaker committees declared unconstitutional. No state can dissolve elected councils. Only elected councils can receive federal allocations. Any official who dissolves elected LG councils commits gross misconduct and can face criminal charges. For one day, Nigerian local government had a legal future. Eighteen months later, the reality is devastating. Zero of 774 LGAs had opened CBN accounts. Not one. The Chief Justice spoke. The governors answered with silence. And N7.43 trillion kept flowing through the very channels the Court declared illegal.

Governors defied the Court through three mechanisms. Administrative obstruction: the CBN imposed a "two-year audited account requirement" that created what analysts called "a loophole for governors to interfere." LGAs that had never had independent accounts could not produce two years of audited records. Catch-22 designed to prevent compliance. Legislative resistance: Governor Soludo of Anambra signed a law mandating that federal allocations "should firstly be deposited into a state-joint LG account," directly contradicting the Supreme Court. Physical intimidation: one southeastern LGA chairman was quoted saying, "Our governor has threatened us not to open accounts with the CBN. What can I do? I have a family." This is a governor threatening an elected official for trying to comply with a Supreme Court order. And it worked. By January 2026, not a single LGA of the 774 in Nigeria had opened a CBN account. The rule of law is a suggestion, and governors do not take suggestions from Abuja.

What This Means For You

• Your LGA chairman is not always the main thief. In many cases, he is a hostage. The governor takes 60 to 75 percent of the money before it ever reaches the LGA. The chairman who complains gets replaced. The chairman who cooperates keeps his job.
• The Supreme Court ruling of July 2024 gave you legal power. But a judgment without enforcement is just a press release with a fancy letterhead. You must be the enforcement.
• If your state is among the 20 that hide LGA budgets, they are hiding because transparency would expose the theft. Demand the budget under the FOI Act.
• Multiple taxation is double robbery. You pay levies at the market for services you never receive, while the governor steals the FAAC allocation meant to provide those same services.
• N23.14 trillion over 16 years is not an abstract number. It is your street that was never paved. Your drain that was never cleared. Your clinic that was never stocked.

The Data

The Lie

Politicians say your LGA chairman is corrupt and wastes the money. Some chairmen are corrupt. No doubt. But many never touch the money. The governor intercepts it through the Joint Account before the chairman sees the balance sheet. The real thief is not in the LGA secretariat on Ikem Street. The real thief is in the Government House, wearing a bespoke agbada, calling the deduction "state coordination." They say the Supreme Court fixed local government in July 2024. It did not. Zero CBN accounts opened. N7.43 trillion still routed through state accounts. Not one governor prosecuted. The ruling exists on paper. The theft continues in practice. The Power Hider has done its work so thoroughly that most Nigerians do not even know the judgment was ignored. The Memory Eraser has made them forget the Court ever spoke. They say "the money no reach" as if it is a natural law, like gravity. It is not a natural law. It is a choice made by governors who know you will not hold them accountable.

The Truth

The Joint Account is not a constitutional necessity. It is a constitutional weapon. Your governor has used it to capture your LGA, your street, your clinic, your market, and your future. The Supreme Court spoke. Nobody enforced. The only remaining force powerful enough to enforce that judgment is you. The citizen who refuses to accept the lie. Who shares the truth. Who votes not for rice or for tribe but for the person who will return your LGA's money to your LGA's account. N23.14 trillion was diverted from your LGA over 16 years. N7.43 trillion was routed after the Supreme Court said stop. Zero of 774 LGAs opened CBN accounts. These are not statistics. They are your stolen street, your flooded drain, your empty clinic, and your child's future diverted to a Government House account.

Your Action

Citizen Verdict — Do These Five Things This Week:

1. Search online for "FAAC allocation" plus your LGA name. Know what your LGA is supposed to receive every month. Write the figure down. Memorize it.
2. Write to your state Accountant-General demanding the exact amount deducted from your LGA's FAAC allocation in the last 12 months. Copy your state House of Assembly Appropriations Committee.
3. Visit budgit.org. Check if your state is among the 10 transparent states or the 20 opaque ones. If your state is opaque, write to your state Speaker demanding LGA budget publication within 30 days.
4. Demand a printed receipt for every levy you pay at the market. Photograph the collector's ID badge. If no receipt is provided, report the unauthorized collection to your state Internal Revenue Service.
5. Ask your next gubernatorial candidate one question: "Will you abolish the State-LGA Joint Account and implement direct FAAC payment to LGAs within your first 100 days?" Record the answer. Hold them to it.

WhatsApp Bomb

"N23.14 trillion diverted from LGAs in 16 years. N7.43 trillion AFTER Supreme Court said STOP. 0 of 774 LGAs opened CBN accounts 18 months later. Your governor steals your street's money. #LGATheft"