In a landmark ruling on Friday, the Supreme Court of Nigeria struck out a high-profile suit filed by the 36 state governments and the Nigeria Governors’ Forum (NGF), challenging the Federal Government’s handling of recovered looted assets amounting to over N1.8 trillion. The apex court ruled that the suit was improperly filed before it, as the matter falls within the jurisdiction of the Federal High Court.
The suit, marked SC/CV/395/2021, was instituted by the state governments to compel the Federal Government to remit both cash and non-cash assets recovered from looters since 2015 into the Federation Account, in line with constitutional provisions.
In a unanimous decision by a seven-member panel, Justice Mohammed Idris delivered the judgment on behalf of Justice Chidiebere Uwa, stating that the Supreme Court lacked the original jurisdiction to entertain the matter. The court held that the proper venue for such a dispute was the Federal High Court, as it involved questions of law and administrative procedures that must be examined at that level first.
The states, through the NGF, alleged that the Federal Government had illegally diverted looted funds and forfeited assets into the Consolidated Revenue Account (CRA) and other accounts not recognised by the Nigerian Constitution. According to court documents, the plaintiffs claimed that between 2015 and 2021, the Federal Government recovered a staggering N1.8 trillion in cash, 167 properties, 450 vehicles, 300 trucks and cargo containers, and 20 million barrels of crude oil valued at over $450 million through various law enforcement agencies and international cooperation.
The plaintiffs argued that under Sections 162(1) and 162(10) of the 1999 Constitution (as amended), all recovered revenues must be paid into the Federation Account, to be distributed among the three tiers of government—federal, state, and local—rather than retained by the federal government alone.
Central to the suit was the legality of the Asset Recovery Account and Interim Forfeiture Recovery Account set up by the Federal Government for warehousing these recovered funds. The states contended that these accounts, and the regulations guiding them, are in direct conflict with the Constitution and the Finance (Control and Management) Act of 1958, which mandates all federally collected revenue to be paid into the Federation Account.
They insisted that failure to remit these funds amounts to a breach of fiscal federalism and transparency in public finance management, denying the states their fair share of national revenue.
“The Constitution is clear: all revenues, including proceeds from recovered assets, belong to the Federation and must be shared accordingly,” said one of the plaintiffs’ lawyers during earlier hearings.
The Federal Government, through the Office of the Attorney General of the Federation (AGF), opposed the suit, arguing that the Supreme Court lacked the jurisdiction to entertain the matter in its original form, as it did not present a direct dispute between the federal and state governments in the manner required for original jurisdiction under Section 232 of the Constitution.
The apex court agreed, siding with the federal government that the nature of the reliefs sought and the procedural issues involved necessitated adjudication at the Federal High Court level first.
While the decision is procedural, not substantive, it represents a major blow to the states’ collective legal strategy and financial claims.
Legal experts have described the ruling as “technically sound but politically sensitive.” Professor Adebayo Oladele, a constitutional law expert at the University of Ibadan, explained that the judgment does not validate the FG’s retention of the funds but rather redirects the states to the appropriate court for such fiscal grievances.
“This ruling doesn’t answer the constitutional question of who rightfully owns the recovered assets. It simply says, ‘This is not the court to answer that question,’” Oladele said. “States can refile at the Federal High Court with proper procedures.”
The Supreme Court’s decision is expected to reignite debate over Nigeria’s fiscal federalism and revenue sharing framework. Analysts believe the ruling could embolden the Federal Government to maintain its control over recovered assets unless challenged at the lower courts.
“This is a wake-up call for the NGF and states,” said policy analyst Chukwuemeka Opara. “They must now build a robust legal strategy and possibly push for legislative reforms to ensure future compliance with the Constitution on asset recovery and distribution.”
Civil society groups have also weighed in, warning that failure to remit recovered funds into the Federation Account undermines transparency and public accountability.
With the dismissal of the suit, the ball is now in the court of the 36 states to reinitiate the case at the Federal High Court, where they may have a better chance of securing a ruling on the substantive issues raised.
In the meantime, calls for transparency continue to mount. Several civil society organisations have demanded a public inventory and audit of all assets recovered by anti-corruption agencies including the EFCC, ICPC, the Nigerian Police Force, and the Office of the AGF.
They insist that Nigerians have a right to know how looted assets are recovered, managed, and utilised—particularly when such funds could be channelled into education, healthcare, and infrastructure.
Key Constitutional Provisions Cited by the Plaintiffs:
Section 162(1): All revenues of the Federation shall be paid into a Federation Account.
Section 162(10): Definitions and inclusiveness of what constitutes revenue for the Federation.
Section 80: Establishment of the Consolidated Revenue Fund of the Federation.
Section 2, Finance (Control and Management) Act 1958: Prescribes proper remittance and usage of public funds.
While the Supreme Court’s judgment may have shut the door for now on the states’ attempt to reclaim their share of recovered loot through the apex court, it has opened a new path for legal redress through the Federal High Court. The battle over the management of Nigeria’s recovered assets is far from over—and may soon resurface in another courtroom.