By Ayo Kehinde
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 from the Federation Account to the 774 local government councils across the country.
In the suit numbered FHC/L/MSC/521/2025, filed at the Federal High Court, Lagos, last Friday, SERAP is seeking an order to compel the CBN to disclose the amounts paid to each council since the recent Supreme Court judgment that barred governors from withholding local government allocations.
SERAP is also asking the court to direct the apex bank to confirm whether any direct payments have been made to local councils in Rivers State and to explain the rationale behind such disbursements.
The suit follows a landmark ruling by the Supreme Court which declared it unconstitutional for governors or any other authority to control, retain, or disburse funds meant for local governments. The apex court held that all allocations from the Federation Account must go directly to democratically elected councils.
“State governors are starving local governments of funds and putting them in peril, despite the Supreme Court’s binding orders,” SERAP said in a statement. “This blatant disregard for the rule of law undermines the integrity of the court and poses a direct challenge to democratic governance.”
The group argued that public access to information about FAAC allocations would promote transparency and allow citizens to hold the CBN and other relevant agencies accountable.
It noted that granting its prayers would uphold the Nigerian Constitution and strengthen democratic principles. According to SERAP, the CBN has a constitutional and statutory duty to protect public funds and ensure that local councils receive their full allocations without interference.
The suit, filed by SERAP’s legal team — Kolawole Oluwadare and Oluwakemi Oni — states in part: “The CBN should be facilitating compliance with the Supreme Court’s orders. If state governors get away with ignoring the court, it will severely damage the CBN’s credibility in carrying out its statutory obligations.”
SERAP expressed concern that many states and the FCT continue to undermine the third tier of government, warning that failure to disburse funds directly to local councils threatens their very existence.
The group stressed that local councils are constitutionally entitled to receive their allocations directly and that further interference by states or the FCT would exacerbate poverty and hinder development at the grassroots.
“States have persistently failed to use these allocations for the benefit of local councils and the people. Disbursing these funds through state governments only empowers corrupt practices,” the group stated.
SERAP also urged the CBN to play a leading role in restoring the autonomy of local councils by ensuring compliance with the Supreme Court decision and blocking attempts by states to divert funds.
The organisation cited the Freedom of Information Act, 2011, and the African Charter on Human and Peoples’ Rights, which it said imposed transparency obligations on public institutions like the CBN.
“The Supreme Court in a groundbreaking judgment has already declared that the Freedom of Information Act applies to the records of the CBN. Nigerians have a right to know how public funds are managed,” the suit read.
It added that reports had confirmed that the 774 local councils had opened dedicated accounts with the CBN to facilitate direct disbursements following the Supreme Court ruling.
The suit also referenced a 2022 statement by former President Muhammadu Buhari, who accused state governors of diverting council funds.
According to Buhari, “If the money from the Federation Account to a state is about N100 million, N50 million will be sent to the chairman but he will sign that he received N100 million. The chairman will pocket the balance and share it with whoever he wants to.”
Meanwhile, according to recent reports, the Federation Account Allocation Committee (FAAC) shared a total of N1.578 trillion among the three tiers of government as revenue generated in March 2025
