SERAP drags CBN to court

Socio-Economic Rights and Accountability Project (SERAP) has filed a legal action against the Central Bank of Nigeria (CBN), accusing the apex bank of non-disclosure of vital information regarding monthly allocations made to the country’s 774 Local Government Areas (LGAs) as required by the Supreme Court ruling.

The organisation maintained that the CBN must publicly release the amounts disbursed to each LGA since the July 2024 ruling.

In a suit instituted at the Federal High Court in Lagos and marked FHC/L/MSC/521/2025, SERAP sought an order compelling the CBN to reveal whether it has complied with the July 2024 Supreme Court judgment mandating that all Federation Account allocations to LGAs be made directly, bypassing state governments.

SERAP argued that the CBN has failed to meet its constitutional and statutory obligations to ensure open management of public funds.

The organisation insisted that full disclosure of LGA allocations is essential to enforcing the court’s decision and safeguarding the autonomy of local governments.

“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,” SERAP stated on LGA allocations suit before the court.

The Supreme Court ruling, delivered in July 2024, had affirmed that state governors and the Minister of the Federal Capital Territory have no legal authority to withhold or manage funds allocated to democratically elected LGAs.

SERAP’s lawsuit claimed that the CBN’s silence raises questions about whether any direct payments have, in fact, been made, particularly in politically sensitive states like Rivers.

“The failure by the CBN to clarify these issues threatens to undermine the rule of law and the integrity of the judiciary,” SERAP warned.

The legal action, filed by SERAP lawyers, Kolawole Oluwadare and Oluwakemi Oni, asserted that the CBN has a pivotal role in maintaining Nigeria’s federal structure by ensuring that funds are distributed equitably and in line with constitutional mandates.

It further argued that ignoring the Supreme Court’s ruling could render local governments powerless and irrelevant.

“If state governors get away with ignoring the court, it will undermine the ability of the bank to credibly perform its statutory duties,” the suit read.

It also raised alarm over the broader implications of starving LGAs of funds.

According to SERAP, withholding constitutionally guaranteed allocations deepens poverty and undermines basic governance at the grassroots level.

“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,” SERAP added.

The legal action comes amid heightened scrutiny of Nigeria’s public finance system, particularly the operations of the Federation Account Allocation Committee (FAAC), which reportedly shared over N1.5 trillion among the three tiers of government in March 2025 alone. Yet, details about how much actually reaches LGAs remain murky.

SERAP cited the Supreme Court’s affirmation that the Freedom of Information Act (FOIA) applies to all public institutions, including the CBN, as grounds for demanding transparency.

“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,” the group noted.

It would be recalled that Nigeria’s LGAs have long struggled with systemic financial mismanagement.

Former President Muhammadu Buhari, during his tenure, lamented that governors often divert local government funds for political purposes.

“If the money from the Federation Account to the state is about N100 million, N50 million will be sent to the chairman, but he will sign that he received N100 million,” Buhari said in 2022, exposing the entrenched corruption at the grassroots level.

According to SERAP, the Supreme Court judgment offers a rare opportunity to correct years of financial abuse and restore credibility to the third tier of government. The CBN, it argued, holds the key to enforcing that shift.

“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,” SERAP said.

As of the time of filing this report, no date has been fixed for the hearing of the matter.