The Socio-Economic Rights and Accountability Project (SERAP) has instituted legal action against the Central Bank of Nigeria (CBN), accusing the apex bank of failing to disclose crucial details of direct payments to Nigeria’s 774 local government areas (LGAs), including the councils in Rivers State, in alleged defiance of a landmark Supreme Court judgment.
The lawsuit, filed last Friday and marked FHC/L/MSC/521/2025 at the Federal High Court in Lagos, seeks a judicial order to compel the CBN to publish information on whether it has complied with the July 2024 ruling by the Supreme Court.
That decision mandated that funds from the Federation Account must be paid directly to democratically elected local governments without interference from state governors or the Federal Capital Territory minister.
In its originating motion, SERAP requested the court to direct the CBN to provide a breakdown of the exact amounts sent to each LGA since the ruling, and to clarify whether any direct payments have been made to local councils in Rivers State.
The organisation also wants the court to compel the bank to disclose the rationale for any such transactions.
According to SERAP, transparency on this matter is critical for public accountability and adherence to the Constitution, especially in light of the alleged continued interference by state governments in local government finances despite the Supreme Court's ruling.
“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,” the group stated in its court filings.
SERAP’s lawsuit comes amid growing frustration among civil society actors and legal analysts over what they describe as the persistent subversion of Nigeria’s federal structure.
The organisation contends that the CBN has a legal and constitutional obligation to enforce and facilitate compliance with the Supreme Court’s decision, especially given the central role it plays in managing the Federation Account.
“State governors are starving local governments of funds and putting them in peril, despite the Supreme Court’s binding orders,” the suit stated, adding that non-compliance with the ruling “poses a direct challenge to the rule of law and the integrity of the judiciary.”
The legal action was filed on behalf of SERAP by its lawyers, Kolawole Oluwadare and Oluwakemi Oni.
The organisation argued that unless institutions like the CBN ensure the enforcement of the Court’s decision, there is a risk that the third tier of government may become extinct due to financial strangulation by state governments.
“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 recognised three tiers of government,” the suit noted.
SERAP further warned that any continued delay or refusal to make direct payments to LGAs not only violates constitutional provisions but also worsens poverty, especially in rural communities that rely on local governments for basic services.
“The disbursement of 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,” the group said.
In March 2025 alone, the Federation Account Allocation Committee (FAAC) reportedly distributed N1.578 trillion among the three tiers of government.
However, questions have remained about how much of the funds actually reach local councils and whether these funds are used for their intended purposes.
Citing the Supreme Court’s affirmation that the Freedom of Information Act (FOIA) applies to all public institutions, including the CBN, SERAP insisted that the bank is legally required to disclose the requested information.
“By the combined reading of the Nigerian Constitution, the Freedom of Information Act 2011 and the African Charter on Human and Peoples’ Rights, there are transparency obligations imposed on the CBN,” SERAP stated.
The issue of financial opacity at the local government level is not new. In 2022, former President Muhammadu Buhari drew national attention to the issue when he accused some governors of diverting LGA funds.
He alleged that a governor could receive N100 million from the Federation Account, send N50 million to the council chairman, and compel the chairman to sign for the full amount, thereby pocketing the rest.
SERAP says that the July 2024 Supreme Court ruling provides an unprecedented opportunity to overhaul the local governance system and protect public funds.
The organisation called on the CBN to take the lead in enforcing the ruling by ensuring full disclosure and compliance.
“The CBN could play an important role in revitalising the 774 councils in the country and improving opportunities for Nigerians who reside in those councils,” the group noted.
The suit also stressed that protecting the rights of local governments to receive direct funding from the Federation Account is essential to safeguarding democratic governance, delivering public services, and promoting sustainable development across Nigeria.
As of press time, the Federal High Court has not fixed a date for hearing the suit.
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