On July 24, 2007, President Umar Musa Yar’Adua ordered the immediate release of funds belonging to the Lagos State Government. The funds had been withheld by the Federal Government during the administration of his predecessor, Chief Olusegun Obasanjo.
The directive was issued at the end of the Federal Executive Council meeting in Abuja. It effectively ends a three-year standoff over statutory allocations and other monies due to Lagos.
The funds were seized after the state created 37 additional Local Council Development Areas in 2003.
“Mr. President has directed that all outstanding funds due to Lagos State be released without further delay,” the Minister of Information, Prof. Dora Akunyili, told State House correspondents.
“This is in line with his commitment to the rule of law, federalism, and reconciliation.”
The funds, running into billions of naira, include statutory allocations to the 20 constitutionally recognized local government areas in Lagos, as well as other federal dues.
The Obasanjo administration had withheld the monies following a legal dispute over the creation of the LCDAs, which the Federal Government argued was unconstitutional.
Babatunde Raji Fashola, SAN, who was Lagos State Governor at the time, welcomed the decision.
In a statement from Alausa, the governor described it as “a new dawn in federal-state relations” and thanked the President for “choosing dialogue and justice over confrontation.”
Legal experts say the release may also influence pending cases at the Supreme Court between the Federal Government and Lagos State.
President Yar’Adua, who assumed office on May 29, has pledged a government of “due process and the rule of law.”
