The Socio-Economic Rights and Accountability Project (SERAP) has publicly urged the Central Bank of Nigeria (CBN) to clarify whether it has begun directly distributing federal allocations to Nigeria’s 774 local government areas (LGAs) from the Federation Account. In its appeal, the group also demanded the release of detailed records showing the exact amounts disbursed to each council across the country.
Public Appeal for Clarity on Grassroots Funding
Using its official X (formerly Twitter) account on Sunday, SERAP addressed the issue directly, stating:
“We’ve urged the Central Bank of Nigeria to immediately disclose whether the bank has commenced direct payment of allocations to the 774 local governments in Nigeria from the Federation Account with the bank, and to publish the amounts directly sent to each council.”
This request comes in the wake of growing allegations that state governors have been diverting local government funds, undermining development efforts at the grassroots level. SERAP argued that transparency in the flow of public funds is essential, especially when mismanagement could severely impact local governance.
Background: Federal Legal Action Against Governors
SERAP’s call reflects a broader context of federal efforts to tackle the misuse of LGA funds. In July 2024, the Nigerian government, through the Attorney General of the Federation, initiated legal action at the Supreme Court against all 36 state governors. The suit accused them of illegally handling federal allocations earmarked for local councils.
The federal government urged the Supreme Court to declare that LGA funds held in the Federation Account must be transferred directly to local governments without being funneled through state administrations. It also sought a legal injunction to prevent governors and their representatives from accessing or controlling those funds, particularly in states where democratically elected local governments are not operational.
The goal of the suit was to obtain constitutional backing for a more autonomous local government structure—one where local councils could receive federal funding directly, thus reducing interference by state authorities.
Federal Directive for Local Councils to Open CBN Accounts
Following the Supreme Court’s ruling on the matter, the federal government instructed all 774 LGAs to open accounts with the Central Bank of Nigeria. This step was designed to facilitate the direct release of their federal allocations, aligning with the vision of true local government autonomy.
However, there has been a lack of clarity and public information on whether the CBN has commenced these direct transfers. SERAP’s recent demands seek to eliminate that ambiguity and ensure the process remains transparent and accountable.
SERAP’s Stand on Financial Transparency
SERAP emphasized that the CBN, as the institution responsible for managing the Federation Account, has both a legal obligation and a public duty to promote transparency. The group maintained that by publicly disclosing disbursement figures and making them accessible via official platforms, the CBN could bolster public confidence and promote good governance.
Moreover, SERAP called for the publication of monthly breakdowns of funds allocated to each LGA, insisting that this move would strengthen democratic accountability at the community level. It argued that transparency is the foundation of responsible public finance management and that ordinary Nigerians have the right to know how resources meant for their local governments are distributed and used.
Support for Local Government Autonomy Builds
SERAP’s demand aligns with broader efforts to strengthen local government autonomy. The Association of Local Governments of Nigeria (ALGON) has voiced its support for the federal government’s stance, emphasizing the importance of financial independence for LGAs in delivering essential services.
In addition, the federal government has signaled its commitment to enforcing compliance. In 2024, it warned that any serving LGA chairperson or councillor found tampering with federal allocations from the Federation Accounts Allocation Committee (FAAC) would face prosecution and potential imprisonment. This firm stance highlights the administration’s resolve to prevent the diversion of grassroots development funds.
What to Expect Going Forward
With the federal government, civic organizations, and local government associations increasingly advocating for direct financial autonomy at the local level, attention is now turning to the CBN’s next move. Whether or not the central bank responds to SERAP’s call for disclosure could shape public perception of its transparency practices and influence the broader debate on fiscal accountability.
As expectations rise, observers anticipate that the CBN will soon confirm whether disbursements to LGAs have begun and—if so—release the full breakdown of transactions as requested. This transparency could mark a turning point in how federal funds are managed at the grassroots, potentially curbing decades-long issues of fund diversion and mismanagement by state-level actors.
