SERAP sues CBN over alleged mismanagement of N100bn in ‘dirty, bad note

The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Central Bank of Nigeria (CBN) over its alleged failure to account for and explain the whereabouts of over N100 billion in “dirty and bad notes.”

The case, captured in Suit Number FHC/L/MSC/441/2024, was filed at the Federal High Court, Lagos.

In a statement on Sunday, SERAP announced that it is seeking a court order compelling the CBN to account for the over N100 billion in dirty and bad notes held in various branches of the Central Bank since 2017

Additionally, SERAP is requesting the court to compel the CBN to explain the whereabouts of an outstanding loan of N1.2 billion granted to the Enugu State government in 2015, as well as an outstanding loan of N1.9 billion granted to the Anambra State government between 2015 and 2016.

Furthermore, SERAP is demanding an explanation from the CBN regarding N7.2 billion allegedly allocated for the construction of the CBN Dutse branch building in 2010 and N4.8 billion intended for the renovation of the CBN Abeokuta branch in 2009. They are also calling for the publication of the names of the contractors who received these funds.

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SERAP’s lawyers, Kolawole Oluwadare and Mrs. Adelanke Aremo, assert that Nigerians have the right to know the whereabouts of public funds, adding that granting the reliefs sought would advance the rights of Nigerians to restitution, compensation, and guarantee of non-repetition.

They stated, “Explaining the whereabouts of the missing public funds, publishing the names of those suspected to be responsible, and ensuring they are brought to justice, along with the full recovery of any missing public funds, would serve the public interest and end the impunity of perpetrators.”

Citing legal provisions, SERAP highlighted Paragraph 708 of the Financial Regulations 2009, which states that “On no account should payment be made for services not yet performed or for goods not yet supplied.”

They also referenced Section 35(2) of the Public Procurement Act 2007, which stipulates that “Once a mobilization fee has been paid to any supplier or contractor, no further payment shall be made to the supplier or contractor without an interim performance certificate.”

 Furthermore, Section 16(6) of the Public Procurement Act mandates that “All bidders shall possess the necessary professional and technical qualifications to carry out particular procurements; the financial capacity and adequate personnel to perform the obligations of the procurement contracts.”

SERAP contends that Section 15(5) of the Nigerian Constitution requires public institutions to eliminate all corrupt practices and abuses of power. The law clearly imposes a responsibility on the CBN to adhere to and observe legal standards.

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They argue that the missing and diverted funds, as alleged by the Auditor-General of the Federation, suggest serious violations of public trust, the provisions of the Nigerian Constitution, the CBN Act, and national and international anti-corruption obligations.

According to SERAP, “These grave violations also reflect a failure of CBN accountability more generally and are directly linked to the institution’s persistent failure to comply with its Act and anti-corruption standards.”

They also pointed out that Nigeria has made legally binding commitments under the UN Convention against Corruption to ensure accountability in the management of public resources. Articles 5 and 9 of the UN Convention against Corruption impose legal obligations on the CBN to ensure proper management of public affairs and public funds.

SERAP is known for its public interest advocacy, often relying on litigation to seek court intervention in cases of alleged infractions by government officials and public institutions.

The CBN’s legal team is expected to provide a response to SERAP’s suit in due course.