LGA Funding Under Scrutiny: SERAP Seeks CBN Disclosure

…Files legal suit over apex bank’s concealment of records

By Friday Obande

The Socio-Economic Rights and Accountability Project (SERAP) has sued the Central Bank of Nigeria (CBN) over what it describes as failure to disclose the details of any direct payments to the 774 local government councils in Nigeria.
The group also demands publication of amounts sent to each council.

Slyke Bulletin recalls that this development followed a landmark judgment by the Supreme Court last July which held that allocations from the Federation Account with the CBN must be paid directly to Local Government Councils, and that “no governor has the power to keep, control or use the money meant for the councils.”

In a suit FHC/L/MSC/521/2025, filed last Friday at the Federal High Court, Lagos, SERAP urged the courts to “direct and compel the CBN to disclose the details of any direct payments to the 774 local government councils in Nigeria including the amounts sent to each council since the Supreme Court judgment.”

The rights group also demanded that the court, “direct and compel the CBN to disclose whether any direct payment has been made from the Federation Account with the CBN to the local government councils in Rivers State and to explain the rationale for any such payment.”

“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.”
“Granting the reliefs sought would go a long way in promoting the values and principles that underlie the Nigerian Constitution 1999 [as amended] and are inherent characteristics of an open democratic society,” argued SERAP.

In its explanation, “State governors are starving local governments of funds and putting them in peril, despite the Supreme Court’s binding orders. 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 is also arguing that, “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.”

SERAP said, “The CBN also has the constitutional and statutory duty to ensure that no part of the Federation is governed contrary to the Nigerian Constitution or by anybody that is not constitutionally empowered to do so.”

According to Kolawole Oluwadare and Ms. Oluwakemi Oni, SERAP’s lawyers, the document stated in parts, “The CBN should be facilitating compliance with the Supreme Court’s orders. If state governors get away with ignoring the court, it will undermine the ability of the bank to credibly perform its statutory duties.

“States and the FCT have continued to undermine and endanger the existence of local governments and their ability to effectively function as the third tier of government as envisioned under the Nigerian Constitution.

“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.

“Local government councils are legitimate owners of their allocations from the Federation Account.

“Ensuring that all restrictions against direct disbursement of allocations from the Federation Account to the 774 councils will comply with the orders by the Supreme Court and stop states and the Federal Capital Territory from tampering with the allocations ahead of the 2027 general elections.

“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 the local government councils and Nigerians.

“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.

“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 CBN should not allow states to act in breach of the Supreme Court judgment and do whatever they like with the public funds meant for local government councils.”