In 2003, Njaba South Local Government was created by Imo State government as a development project expecting to be sanction by the federal government of Nigeria before it could be fully functional. Njaba South comprised of all the communities in the southern side of Njaba River, that is, old Umuaka autonomous community. The development site for the Local Government headquarter is located very close to Afor Market, behind Hill Top Primary School.

However, Njaba South was among the 500 Local Government Area (LGA) that were created or in pipeline during the election period of 2003, which caused conflict between the federal government and the states that created them. As a result the federal government withheld her funding of the LGA, claiming that she will not release fund from the federal account for any LGA that is not stated in the federal constitution of Nigeria. This federal government action forced some states to scrap large numbers of the newly created LGA.

However, Njaba South LGA was not affected by the action, since Imo State government decided to fund it with state fund. The sum of two million five hundred thousand naira (N2,500,000) is released each month to the LGA development centre, which is still under development. The people of Njaba South appointed a Care-taker committee who oversee the development of the site to a full fledged local government headquarter.