The 36 state governments and the Nigeria Governors’ Forum (NGF) have lost their legal battle against the federal government over the control and distribution of recovered looted funds.

In a unanimous judgment delivered by a seven-member panel of the Supreme Court, the apex court dismissed the suit filed by the states, ruling that the case was wrongly instituted before it.

The lead judgment, prepared by Justice Chidiebere Uwa and read by Justice Mohammed Idris, held that the plaintiffs had improperly invoked the court’s jurisdiction in their attempt to challenge the federal government’s alleged diversion of recovered loot from the Federation Account.

The governors had accused the federal government of failing to remit over N1.8 trillion in recovered cash, as well as 167 properties, 450 cars, 300 trucks and cargoes, and 20 million barrels of crude oil—collectively valued at over N450 billion—into the Federation Account between 2015 and 2021. They argued that instead of depositing the recovered assets into the constitutionally recognized Federation Account for the benefit of all tiers of government, the funds were diverted to the Consolidated Revenue Accounts (CRA) and other accounts not recognised by the Nigerian Constitution.

The plaintiffs argued that the Asset Recovery Account and Interim Forfeiture Recovery Account, used by the federal government to receive and manage recovered assets, were illegal, and that the Asset Recovery Regulation violated the Constitution. They contended that these accounts allowed the federal government to circumvent constitutional provisions and apply the recovered funds unilaterally.

Citing sections 162(1), 162(10), and 80 of the Constitution, along with Section 2 of the Finance (Control and Management) Act of 1958, the plaintiffs maintained that all proceeds from forfeited and recovered assets constitute national revenue and must be paid into the Federation Account. They asked the court to compel the federal government to remit the allegedly diverted funds and assets and to produce a comprehensive account of the recovered assets not deposited in the Federation Account.

The state governments also sought an order directing the Revenue Mobilisation Allocation and Fiscal Commission (RMFAC) to develop a framework for equitable distribution of recovered assets among the federal, state, and local governments.

The Supreme Court, however, declined to entertain the suit, effectively siding with the federal government and halting the governors’ demand for a judicial review of how recovered looted assets have been managed since 2015.