Supreme Court Rules Against 36 State Governors in Battle Over Recovered Looted Funds
In a landmark ruling that will shape the management of Nigeria’s recovered assets for years to come, the Supreme Court of Nigeria has dismissed the lawsuit filed by the 36 state governments and the Nigeria Governors’ Forum (NGF) against the federal government. The suit, which challenged the control, distribution, and alleged mismanagement of recovered looted funds, was thrown out on the grounds that it was wrongly filed before the apex court.
This legal defeat has major implications not just for intergovernmental fiscal relations in Nigeria, but also for the accountability and transparency surrounding recovered public assets. In a country where corruption remains a deeply rooted issue, how looted funds are recovered and redistributed is a topic of immense national importance.
What Was the Case About?
The 36 state governors, under the umbrella of the Nigeria Governors’ Forum, accused the federal government of unconstitutionally diverting over ₦1.8 trillion in recovered funds, as well as a trove of physical assets, from the Federation Account. According to the plaintiffs, between 2015 and 2021, the federal government recovered a vast array of looted assets including:
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₦1.8 trillion in cash
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167 properties
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450 vehicles
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300 trucks and cargoes
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20 million barrels of crude oil
Altogether, the value of these assets exceeds ₦450 billion.
The governors argued that instead of remitting these recovered assets into the Federation Account—as required by the Nigerian Constitution—the federal government deposited them into alternative accounts such as the Consolidated Revenue Account (CRA) and other accounts not recognized by the Constitution.
The States’ Legal Argument
In their suit, the governors contended that the federal government’s actions violated multiple provisions of the Nigerian Constitution, particularly:
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Section 162(1) and 162(10): These mandate that all revenues collected by the federal government—including recovered assets—must be paid into the Federation Account for distribution among the three tiers of government: federal, state, and local.
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Section 80: This section emphasizes that all revenues and monies received on behalf of the government must be paid into the appropriate government account.
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Section 2 of the Finance (Control and Management) Act of 1958: This law governs how government revenues are to be managed and accounted for.
The governors also claimed that the federal government created illegal accounts, such as the Asset Recovery Account and the Interim Forfeiture Recovery Account, to warehouse and manage these recovered funds. Furthermore, they argued that the Asset Recovery Regulation, which outlines how recovered assets are to be handled, was unconstitutional.
According to them, these regulatory instruments allowed the federal government to sidestep constitutional obligations and spend recovered funds without due process or the involvement of state and local governments.
In addition to asking the court to compel the federal government to refund the allegedly diverted funds, the governors also sought an order directing the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) to establish a framework for the equitable sharing of recovered assets among the three levels of government.
Supreme Court’s Verdict: A Blow to the States
Despite the weight of these arguments, the Supreme Court unanimously dismissed the suit. The seven-member panel of justices, in a decision led by Justice Chidiebere Uwa and delivered by Justice Mohammed Idris, held that the case was wrongly instituted before the apex court.
The court ruled that the governors had failed to properly invoke its jurisdiction, meaning that the Supreme Court was not the appropriate forum for the case in its current form.
This judgment effectively sided with the federal government and shut the door on further judicial review of how recovered looted assets have been handled since the beginning of President Muhammadu Buhari’s administration in 2015—a period during which aggressive anti-corruption campaigns led to the seizure of numerous stolen assets.
Implications for Governance and Transparency
The Supreme Court’s ruling raises significant questions about the future of asset recovery and fiscal federalism in Nigeria. While the federal government may have won the legal battle, the issue of transparency in the handling of recovered assets remains a matter of public concern.
The governors had hoped that a favorable ruling would not only return billions of naira to the Federation Account but also reinforce the constitutional principle that national wealth must be shared equitably. Instead, the judgment leaves the federal government with discretionary control over how and where recovered funds are allocated.
Critics argue that this opens the door for potential misuse and lack of accountability, especially in the absence of clear legislative or judicial checks on the executive’s control of recovered assets.
What the Federal Government Has Said
The federal government has consistently maintained that it is operating within the bounds of the law in its handling of recovered loot. Officials have argued that the recovered funds are used for strategic national projects, including infrastructure, security, and social welfare programs.
However, the lack of detailed public accounting and transparent reporting has led to skepticism from civil society, anti-corruption watchdogs, and now, state governments.
The Role of RMAFC and the Call for Reform
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has been called upon by the governors to play a more active role in designing a transparent framework for the sharing of recovered assets. Under the Constitution, RMAFC is responsible for monitoring revenue collection and distribution in Nigeria.
While the Supreme Court did not rule on the merits of this request due to procedural technicalities, the broader conversation about RMAFC’s role in asset recovery and sharing is far from over.
Legal analysts suggest that the states may have a better chance at redress by refiling the case in a lower court or by pursuing legislative reforms that clearly define how recovered assets should be treated.
What’s Next for the Governors?
Though the Supreme Court’s ruling is final and binding, it does not completely foreclose other avenues. Legal experts believe the governors can:
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Approach a lower court with proper jurisdiction.
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Engage the National Assembly to push for a constitutional amendment or legislation that clarifies the management of recovered assets.
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Call for an audit of all recovered assets through public institutions like the Auditor-General’s Office or the National Assembly Public Accounts Committee.
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Mobilize public opinion to pressure the federal government into more transparent asset management.
Conclusion: A Pyrrhic Victory?
While the federal government may view the Supreme Court’s judgment as a legal vindication, the underlying concerns about the equitable distribution of national resources remain unresolved. The governors may have lost this battle, but the war over fiscal responsibility and transparency in Nigeria’s federal system is far from over.
As corruption continues to plague the country, Nigerians must demand accountability—not just in how stolen funds are recovered, but also in how they are reinvested to improve the lives of citizens at every level of government.
Stay tuned to NaijaRush for more in-depth analysis of Nigeria’s legal battles, anti-corruption efforts, and the fight for equitable governance.
