SERAP Takes Legal Action Against CBN Over Missing Funds and Dirty Notes

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The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Central Bank of Nigeria (CBN), urging the Federal High Court in Lagos to investigate the disappearance of over N100 billion in "dirty notes" allegedly held at various CBN branches since 2017.


SERAP's suit, identified as FHC/L/MSC/441/2024, seeks the court's intervention to mandate the CBN to account for several significant financial discrepancies. This includes N7.2 billion earmarked for the construction of the CBN Dutse branch in 2010 and N4.8 billion allocated for the renovation of the CBN Abeokuta branch in 2009. Additionally, SERAP demands transparency regarding the N1.2 billion loan to the Enugu State government in 2015 and the N1.9 billion loan to the Anambra State government between 2015 and 2016.


The civil society organization argues that the CBN's failure to account for these funds constitutes a severe breach of public trust, violating both national laws and international anti-corruption commitments. SERAP emphasizes the necessity for the CBN to publish the names of contractors involved and those suspected of diverting these funds.


According to SERAP, the Auditor-General of the Federation's findings indicate significant violations of financial regulations, suggesting that funds intended for destruction or proper use were mismanaged. This mismanagement allegedly undermines the CBN's ability to fulfill its statutory duties and erodes public confidence in the institution.


SERAP's legal team, led by Kolawole Oluwadare, highlights several regulatory frameworks to bolster their case:

- Financial Regulations 2009: Prohibits payment for services not rendered.

- Public Procurement Act 2007: Mandates that no further payments be made to suppliers or contractors without an interim performance certificate.

- Nigerian Constitution: Imposes obligations on public institutions to eliminate corruption and requires transparency and accountability.


The lawsuit also references Nigeria's commitments under the UN Convention against Corruption, which mandates proper management of public resources and accountability in public affairs. Articles 5 and 9 of the Convention specifically require adherence to standards that prevent corruption and ensure transparent financial practices.


SERAP insists that Nigerians have the right to know how public funds are managed. They argue that granting the requested reliefs would promote restitution, compensation, and prevent future violations. The lawsuit underscores the importance of transparency and accountability, fundamental principles enshrined in Nigeria's Constitution and international agreements. 


The Auditor-General's 2020 report reveals that over N100 billion in "dirty and bad notes" has been retained by the CBN since 2017. There is concern that these notes, intended for destruction, may have been diverted back into the economy, raising serious questions about financial integrity within the CBN.


SERAP's legal action against the CBN seeks to address significant financial irregularities and enforce greater accountability within Nigeria's central banking system. By bringing these issues to the Federal High Court, SERAP aims to ensure that public funds are managed transparently and that any misappropriation is thoroughly investigated and rectified.

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