(Bloomberg) -- Nigeria's state governors sued the federal government for allegedly failing to share billions of dollars in confiscated funds with their administrations.
The heads of the West African nation's 36 states filed a case with the Supreme Court in March seeking an order that President Muhammadu Buhari explain his government's use of 1.84 trillion naira ($4.7 billion) of stolen cash that's been recovered. Funds have bypassed the proper account, being assigned either to special projects or unknown destinations, according to the lawsuit.
“The states have been denied their fair share,” the Nigeria Governors' Forum said in an affidavit submitted to the court on June 16. The plaintiffs want the court to rule that Buhari, Finance Minister Zainab Ahmed and Attorney General Abubakar Malami acted unconstitutionally by not transferring reclaimed funds to the so-called Federation Account for distribution between the different tiers of government.
A spokesman for Malami defended the central government's actions. Spokesmen for Buhari and Ahmed declined to comment on the lawsuit, which was publicly disclosed for the first time this week.
Nigerian states were collectively reliant last year on allocations from the Federation Account for 64% of their 3.6 trillion naira revenue, data from the government's statistics agency show. Most spending by state governments goes toward recurrent costs and loan repayments, leaving little room for capital investment.
On top of 1.84 trillion naira in various currencies, the central government has recovered 167 properties, 750 vehicles and crude oil worth more than 450 billion naira since Buhari was elected to office in 2015, according to the affidavit.
Buhari and Ahmed “have failed to remit the said sums into the Federation Account,” which “have been applied to the sole purpose of the Federal Government,” the affidavit said. “Also, the recovered assets have been largely unaccounted for.”
State governors frequently lobby for a more favorable division of public funds. They recently criticized the proposed restructuring of the national oil company because only central government ministries will be shareholders.
Military Dictator
More than $634 million stolen by former military dictator Sani Abacha and his associates has been repatriated from abroad in two tranches.
Of that amount, Buhari's government directed $322.5 million returned by Switzerland to selected social investment programs “without due allocation” and “much to the detriment” of the states, the lawsuit alleges. An agreement with the U.S. and the British crown dependency of Jersey for Nigeria's sovereign wealth fund to administer $311.8 million in forfeited funds is “in gross violation of the constitution,” it said.
Recoveries from abroad are governed by international conventions and agreements rather than local legislation, Umar Gwandu, Malami's spokesman, said. “Nigeria must always strive to fulfill its international commitments in the repatriation and use of stolen funds and assets,” he said. The central government has also handled assets seized domestically in a lawful manner, Gwandu said.
The governors are seeking a judgment directing Buhari's administration to account for the recovered funds and move them to the Federation Account. All “illegally diverted revenue must be repaid” from the central government's own funds or its portion of the shared account, the lawsuit said.
The governors are “confident that the Supreme Court will resolve the long-standing dispute” between the central and state governments “over the disbursement of looted funds recovered on behalf of the nation,” their lawyer, Femi Falana, said.
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