The Supreme Court’s landmark ruling of July 11, 2024, granting full financial autonomy to Nigeria’s 774 local government areas and abolishing the State-Local Government Joint Account, marks a pivotal moment in the nation’s governance and constitutional development. This decision aims to enhance grassroots development, fiscal federalism, and democratic accountability by eliminating longstanding state-level interference in local government finances. This study critically evaluates the ruling through a multidisciplinary lens, exploring the historical, legal, and political dimensions of local government autonomy. It examines the adverse effects of the joint account system, including fiscal mismanagement and underperformance in service delivery, and assesses how financial independence might transform governance outcomes across Nigeria’s geopolitical zones. Using a mixed-methods approach—comprising legal analysis, policy review, stakeholder interviews, and empirical data—the paper investigates local governments’ readiness for financial autonomy, institutional enforcement capacity, and evolving patterns of political accountability and service innovation. Findings highlight the transformative potential of the ruling but also expose key risks: limited administrative capacity, institutional corruption, weak internal controls, and resistance from some state actors. To address these, the study recommends the creation of a national fiscal framework, robust financial oversight, legal harmonization across government tiers, and targeted capacity-building for local administrators. In conclusion, while the Supreme Court’s decision lays the groundwork for decentralized governance, its success depends on sustained political will, institutional reform, and coordinated stakeholder action to build effective and transparent local governments.