The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Central Bank of Nigeria (CBN) over its alleged failure to disclose details of direct payments made to Nigeria’s 774 Local Government Areas (LGAs), including Rivers State.
The case, numbered FHC/L/MSC/521/2025, was lodged on Friday at the Federal High Court in Lagos.
SERAP is seeking a court order compelling the CBN to provide full disclosure on allocations sent to each local government council following last year’s Supreme Court ruling.
Supreme Court Judgment and SERAP’s Legal Argument
SERAP’s lawsuit comes after a landmark Supreme Court judgment in July 2024, which ruled that allocations from the Federation Account must be directly disbursed to democratically elected local government councils. The judgment further declared that state governors lack the authority to retain, control, or use local government funds.
In its suit, SERAP argues that the CBN must ensure transparency and accountability, stating: “The CBN should make it possible for citizens to have access to the details of any direct payments to the 774 local government councils to ensure transparency and accountability and judge whether the CBN and other agencies are complying with the Supreme Court judgment.”
Represented by lawyers Kolawole Oluwadare and Oluwakemi Oni, SERAP maintains that granting its request would align with the values and principles enshrined in the Nigerian Constitution (1999, as amended), reinforcing democratic transparency.
Allegations against state Governors
SERAP accuses state governors of starving local governments of funds, despite the Supreme Court’s ruling. The group argues that governors’ continued refusal to comply undermines judicial integrity and poses a direct challenge to the rule of law.
“State governors’ blatant disregard for the Supreme Court’s orders undermines the integrity of the court and poses a direct challenge to the rule of law,” SERAP stated.
It further asserts that the CBN has a duty to act in the public interest, ensuring that each council receives its rightful share directly from the Federation Account.
“The CBN ought to act in the public interest to ensure that the 774 councils in the country directly get their own money from the Federation Account, as ordered by the Supreme Court,” the suit argues.
SERAP contends that the CBN has a constitutional and statutory obligation to uphold governance standards, ensuring that all tiers of government function lawfully.
“The CBN has a constitutional and statutory duty to protect the allocations in the Federation Account and the public funds disbursed from that Account directly to each of the constitutionally recognized three tiers of government.”
“The CBN also has the constitutional and statutory duty to protect any tier of the federal governance structure from going extinct or being destroyed,” SERAP added.
Call for Supreme Court Compliance Ahead of 2027 Elections
With the 2027 general elections approaching, SERAP is urging the court to prevent further restrictions on direct disbursement of funds to local governments.
“States and the FCT no longer have the right to retain the allocations for local governments in the Federation Account, as they have persistently failed to use the allocations for the benefit of local government councils and Nigerians,” SERAP argued.
The organization warns that allowing state governments to divert these funds could exacerbate poverty and disadvantage the nation’s most vulnerable citizens.
“The disbursement of the allocations meant for the 774 councils to states would be at the expense of poor Nigerians and continue to undermine the rights and well-being of those at the bottom of the economy and exacerbate the growing poverty in the country.”
With this lawsuit, SERAP seeks to reinforce financial accountability and ensure compliance with the Supreme Court’s directive, preventing governors from withholding funds meant for local governments.
What you should know
In 2024, the Federal Government, through the Attorney General of the Federation, filed a suit at the Supreme Court against the 36 state governors, citing alleged misconduct in the handling of local government funds.
- In the suit, the Federal Government urged the Supreme Court to declare that funds standing to the credit of local governments in the Federation Account must be paid directly to the councils, rather than routed through state governments.
- The government also sought “an order of injunction restraining the governors, their agents, and privies from receiving, spending, or tampering with funds released from the Federation Account for the benefit of local governments when no democratically elected local government system is in place in the states.”
The legal action aimed to secure a constitutional interpretation that would compel direct allocation of federal funds to LGAs, bypassing state control.
Following the Supreme Court’s ruling, the Federal Government directed all local government councils across the country to open accounts with the Central Bank of Nigeria (CBN) to facilitate the direct disbursement of allocations.
