The Socio-Economic Rights and Accountability Project (SERAP) has instituted legal action against the Central Bank of Nigeria (CBN) over its alleged failure to disclose details of direct allocations to Nigeria’s 774 Local Government Areas (LGAs), including councils in Rivers State, in violation of a Supreme Court judgment delivered in July 2024.

The suit, marked FHC/L/MSC/521/2025, was filed on Friday at the Federal High Court in Lagos.

SERAP is seeking an order compelling the CBN to confirm whether any direct payments have been made from the Federation Account to LGAs, as mandated by the landmark ruling.

The Supreme Court had declared that allocations from the Federation Account must be paid directly to local councils.

It held that state governors and the Minister of the Federal Capital Territory lack the legal authority to withhold, manage, or interfere with funds meant for democratically elected local governments.

SERAP’s suit requests the court to order the apex bank to disclose the amounts disbursed to each LGA since the court’s ruling and to explain the rationale behind any such disbursements, especially with reference to Rivers State.

“The CBN should ensure citizens have access to information on any direct payments made to the 774 Local Government Councils to promote transparency and accountability,” SERAP said in court documents.

According to the group, the CBN is constitutionally and statutorily bound to comply with the Nigerian Constitution and promote transparency, particularly in view of the Supreme Court’s directive.

“State governors are starving local governments of funds and putting them at risk, despite binding court orders,” SERAP said, warning that continued disobedience to the judgment “poses a direct challenge to the rule of law and the judiciary’s authority.”

The suit, filed on behalf of SERAP by Kolawole Oluwadare and Oluwakemi Oni, emphasized that the CBN has a critical role in safeguarding Nigeria’s federal structure and ensuring compliance with the Constitution.

“If governors can flout the Supreme Court’s orders with impunity, it undermines the CBN’s ability to perform its statutory responsibilities credibly,” the suit noted.

SERAP raised concerns over the ongoing marginalisation of LGAs by state authorities, arguing that such actions threaten the survival and effectiveness of the third tier of government, as recognised in the Constitution.

“The CBN has a constitutional and statutory duty to protect funds in the Federation Account and ensure their direct disbursement to the constitutionally recognised three tiers of government,” the group added.

It warned that any restriction or tampering with local government allocations violates constitutional provisions and could deepen poverty nationwide.

“The disbursement of local government funds through states, rather than directly, will only worsen the plight of poor Nigerians and erode grassroots governance,” it stated.

The lawsuit comes amid rising scrutiny of the Federation Account Allocation Committee (FAAC), which reportedly shared N1.578 trillion among the three tiers of government in March 2025. However, the extent to which LGAs receive their full share remains unclear.

The Supreme Court has previously ruled that the Freedom of Information Act applies fully to all public institutions, including the CBN. SERAP is now invoking that judgment to compel the bank to disclose the requested information and uphold citizens’ right to know how public resources are managed.

“By virtue of the Nigerian Constitution, the Freedom of Information Act 2011, and the African Charter on Human and Peoples’ Rights, the CBN is bound by clear transparency obligations,” the organisation noted.

Mismanagement of LG funds has long plagued Nigeria’s political system. In 2022, former President Muhammadu Buhari lamented how governors routinely shortchange local government chairmen.

“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 at the time.

SERAP believes the Supreme Court’s decision presents a critical opportunity to redress such abuses and strengthen LGAs’ capacity to serve their communities.

“The CBN can play a transformative role in revitalising Nigeria’s 774 local councils and improving the lives of millions at the grassroots,” the organisation concluded.

As of the time of filing this report, no hearing date has been scheduled.