The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Central Bank of Nigeria (CBN) over its alleged refusal to release details of federal allocations disbursed directly to Nigeria’s 774 Local Government Areas (LGAs), including Rivers State.

SERAP lodged the suit—numbered FHC/L/MSC/521/2025—at the Federal High Court in Lagos on Friday, asking the court to compel the apex bank to make public all relevant financial records tied to these disbursements.

This legal action follows a landmark Supreme Court judgment in July 2024, which ordered that funds from the Federation Account must be transferred directly to democratically elected local councils, effectively removing the powers of state governors to control these allocations.

Push for Financial Transparency and Rule of Law

SERAP argues that the CBN, as the principal custodian of national finances, must act in accordance with the Supreme Court’s decision by ensuring transparency in the distribution of public funds. The organization insists that Nigerians deserve to know how much money each LGA has received since the court issued its judgment.

In its filing, SERAP emphasized:

“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 legal counsel Kolawole Oluwadare and Oluwakemi Oni, SERAP asserts that its demand aligns with constitutional values that prioritize democratic accountability and the right of citizens to monitor how public funds are distributed and used.

State Governors Accused of Sabotage

At the heart of SERAP’s argument lies a stern accusation against Nigeria’s 36 state governors. According to the group, despite the clear verdict of the Supreme Court, several governors continue to withhold or misappropriate funds meant for LGAs, a situation that threatens local governance and undermines the integrity of the judiciary.

“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.

The group maintains that only through transparent and direct disbursement of funds can local governments function independently and fulfill their constitutional roles. By not disclosing these transactions, the CBN, in SERAP’s view, risks becoming complicit in the erosion of Nigeria’s democratic institutions.

CBN’s Legal Duty Under Scrutiny

SERAP contends that the CBN carries a constitutional and statutory responsibility to safeguard public funds and uphold the federal governance structure. The organization argues that the apex bank must protect the financial lifeline of LGAs, especially given their vulnerability in the current political climate.

“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 notes.

Furthermore, SERAP warns that any attempt to undermine local governance by limiting access to direct funding could have serious national consequences.

“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,” it said.

“The CBN also has the constitutional and statutory duty to protect any tier of the federal governance structure from going extinct or being destroyed.”

Urgency Ahead of 2027 Elections

With the 2027 general elections approaching, SERAP is raising red flags over the persistent manipulation of local government finances. The group believes this financial suppression not only violates court orders but also threatens to deepen poverty and weaken democratic participation at the grassroots.

“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 warned.

It further noted that such financial control by states ultimately comes at the expense of poor Nigerians, potentially exacerbating inequality and stifling development across communities.

“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.”

Background: Federal Government vs State Governors

In 2024, the Federal Government, through the Attorney General of the Federation, initiated legal action against all 36 state governors. The suit accused them of mismanaging local government funds and failing to establish democratically elected councils, as required by law.

In its submission, the Federal Government requested the Supreme Court to issue a declaration that funds from the Federation Account must be paid directly to LGAs, bypassing state interference. It also sought a perpetual injunction to prevent governors from accessing or spending these funds when no elected council exists.

This landmark case culminated in a July 2024 ruling that redefined the financial autonomy of local governments. Following the judgment, the Federal Government directed all local councils to open operational accounts with the CBN to receive allocations directly—removing state governments from the process entirely.

The Way Forward

SERAP’s latest lawsuit seeks not only to enforce this Supreme Court judgment but also to strengthen citizen oversight of public finances. By compelling the CBN to release all records of LGA allocations, SERAP aims to foster a culture of transparency that holds both federal and state institutions accountable.

The outcome of this legal challenge could set a powerful precedent. If the court rules in SERAP’s favor, it would reinforce the principle that public funds must be openly administered, and that no tier of government should operate without public scrutiny.

As Nigeria prepares for its next electoral cycle in 2027, the battle over local government autonomy and financial transparency may very well define the country’s democratic trajectory.