The Socio-Economic Rights and Accountability Project (SERAP) has called on Central Bank of Nigeria (CBN) Governor Olayemi Cardoso to confirm whether the apex bank has begun transferring funds directly to Nigeria’s 774 local government councils from the Federation Account.
In a Freedom of Information (FOI) request dated 10 May 2025 and signed by its deputy director, Kolawole Oluwadare.
The rights group urged the CBN to not only disclose any such transactions but also publish the specific amounts disbursed to each local council.
SERAP further demanded that the CBN clarify whether any direct allocations have been made to local government councils in Rivers State and explain the justification behind such payments, if any.
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The request follows a July 2024 Supreme Court ruling, which affirmed that only democratically elected local councils have the right to receive funds directly from the Federation Account.
The court held that state governors or other institutions have no legal authority to control or withhold these allocations.
SERAP argued that the CBN has both constitutional and legal obligations to safeguard the integrity of the Federation Account and ensure that funds are distributed transparently to all tiers of government in line with constitutional provisions.
The organisation maintained that allowing funds to be handled by unelected or unauthorised entities violates the Nigerian Constitution and undermines democratic governance at the grassroots level.
The letter read in part: “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.
“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 constitutional and statutory duties.
“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.
“We would be grateful if the recommended measures are taken within 7 days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest.
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“SERAP is concerned that 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 1999 [as amended].
“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.
“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.
“The CBN has a responsibility to comply with the Nigerian Constitution and the country’s international human rights and anticorruption obligations in the exercise of its statutory powers and functions.
“Local government councils are entitled to a direct payment from the Federation Account of the amount standing to its credit in the said Federation Account. States should not be collecting, receiving, spending or tampering with the local government council funds from the Federation Account meant for the benefit of the councils.
“SERAP notes that the Supreme Court, in a groundbreaking judgment, declared that the Freedom of Information Act ‘is applicable and applies to the public records in the Federation’, including those kept by the CBN.
“By the combined reading of the provisions of the Constitution of Nigeria, the Freedom of Information Act 2011 and the African Charter on Human and Peoples’ Rights, applicable throughout Nigeria, there are transparency obligations imposed on the CBN to widely disclose the information sought by SERAP.
“The Nigerian Constitution, Freedom of Information Act, and the country’s anti-corruption and human rights obligations rest on the principle that citizens should have access to information regarding their public institutions’ activities.
“According to our information, Nigeria’s Supreme Court in a landmark judgment declared unconstitutional and unlawful the retaining and using by the 36 state governors and FCT minister of allocations in the Federation Account meant for the 774 local governments in the country.
“According to the Court, no governor or other agencies have the power to keep, control, or disburse in any manner the allocations from the Federation Account to local government councils. Any direct disbursement of such allocations must be paid to democratically elected local government councils.
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“Following the judgment, the 774 local governments have reportedly opened dedicated accounts with CBN for the direct disbursement of allocations to them from the Federation Account.
“SERAP notes that former president Muhammadu Buhari had in December 2022 stated that, ‘If the money from the Federation Account to the State is about N100m, N50m will be sent to the chairman but he will sign that he received N100m. The chairman will pocket the balance and share it with whoever he wants to share it with.
“According to Buhari, ‘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. The chairman will pocket the balance and share it with whoever he wants to share it with.’
“According to 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.”
