Nigerian court curbs EFCC's sweeping financial probe of Oyo State
A Nigerian federal court has blocked the anti-graft agency's blanket request for Oyo State's contractor records, establishing a legal boundary that reduces regulatory uncertainty for entities doing business with the state.
A Federal High Court in Ibadan has restrained Nigeria’s Economic and Financial Crimes Commission from investigating the finances of Oyo State. Justice Nkeonye Maha on Wednesday set aside a June 2, 2025 letter demanding the state accountant general furnish copies of every contract and contractor payment executed between 2021 and 2025. The judge declared the request speculative, characterizing it as a "fishing expedition" rather than a targeted probe.
The ruling carries significant implications for companies operating in Nigeria's subnational economies. Broad, unspecific financial audits by federal anti-graft agencies expose private contractors to severe operational disruptions and reputational damage, even without formal charges. By invalidating the EFCC’s sweeping demand, the court removes an immediate layer of regulatory risk for businesses holding state-level infrastructure or service contracts.
The dispute originated when Oyo State officials asked the EFCC to identify the specific contractors or companies under investigation so they could supply relevant records. When the agency failed to narrow its scope, the state filed suit.
Counsel for Oyo State, led by Attorney General Abiodun Aikomo, argued that compiling years of transaction data was an unduly burdensome requirement. They contended the EFCC was attempting a "roving enquiry" devoid of specific allegations, thereby violating the plaintiffs' constitutional right to fair hearing.
The EFCC, represented by counsel I.G. Ojibor, defended its actions by citing Section 38 of the EFCC Act (2004). This provision authorizes the commission to demand information from any authority without hindrance, which the agency argued permitted a blanket examination of the state’s finances.
Justice Maha rejected this interpretation. The judge acknowledged the commission's statutory powers but ruled they are bound by constitutional limits. According to the judgment, Section 38 empowers the EFCC to demand information strictly for investigating specific offences, not for "speculative or roving enquiries."
For market participants, the judgment establishes a crucial procedural check on federal oversight of state spending. It signals that anti-corruption agencies must ground their financial demands in concrete evidence, providing greater legal predictability for investors and contractors engaged with Nigerian state governments.
