The Socio-Economic Rights and Accountability Project (SERAP) has called on the Central Bank of Nigeria (CBN) Governor, Mr Olayemi Cardoso, to clarify whether the bank has started directly disbursing funds from the Federation Account to Nigeria’s 774 local government councils.
In a Freedom of Information request dated Saturday, 10 May 2025 and signed by its deputy director, Kolawole Oluwadare, SERAP urged Cardoso to “immediately disclose whether the bank has commenced the direct disbursement of allocations to the 774 local government councils in Nigeria from the Federation Account with the CBN and to widely publish the amounts, if any, so far directly sent to each of the councils.”
The group also asked the CBN to confirm if any funds have been paid to local governments in Rivers State, and to “explain the rationale for any such payment.”
Their demand follows a Supreme Court ruling in July 2023 which held that only democratically elected local councils are entitled to receive allocations directly.
The court also ruled that neither governors nor any agency has the authority to control, withhold or manage local government funds.
SERAP stated that the CBN is constitutionally obligated to protect public funds in the Federation Account and ensure that the three tiers of government receive their allocations without interference.
“The CBN ought to act in the public interest to ensure that the 774 councils in the country directly get their own allocations from the Federation Account, as ordered by the Supreme Court,” SERAP said.
The organisation expressed concern that many state governors are ignoring the court’s ruling and “starving local governments of funds.”
According to the group, “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.”
It warned that failure by the CBN to enforce the court’s order would weaken the rule of law and embolden governors to continue violating constitutional provisions.
“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.”
SERAP emphasised that blocking direct disbursement to councils could worsen poverty and deny essential services to the grassroots.
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“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,” it said.
The group urged the CBN to act within seven days or face legal action.
“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.”
The letter noted that “Local government councils are legitimate owners of their allocations from the Federation Account,” and stressed that governors and the FCT have “persistently failed to use the allocations for the benefit of the local government councils and Nigerians.”
SERAP further said, “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.”
The group insisted that the CBN also has a duty to stop any tier of government from being “destroyed or made extinct.”
Referencing a landmark ruling, it noted, “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.”
“Any direct disbursement of such allocations must be paid to democratically elected local government councils.”
SERAP also recalled former President Muhammadu Buhari’s 2022 comment about local government funds being siphoned by state officials.
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.”
The organisation pointed out that the Federation Account Allocation Committee (FAAC) shared N1.578 trillion in March 2025 among the three tiers of government.
It insisted that transparency laws and international obligations require the CBN to disclose how public funds are being managed.
“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,” it said.