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FG Urges Supreme Court to Compel Osun State Gov’t to Refund Seven Months’ LG Allocations Over Alleged Contempt and Misuse
The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, has urged the Supreme Court to compel the Osun State Government to refund seven months’ worth of local government allocations to the Minister of Finance.
Fagbemi made the request in a response filed through his legal counsel, Chief Akin Olujimi (SAN), countering a suit initiated by the Osun State Government via its attorney general. Osun had sued the AGF as the sole defendant, alleging that the Federal Government failed to release statutory allocations to its 30 local government councils for March 2025.
In the case marked SC/CV/379/2025, Osun claimed that when it queried the Ministry of Finance about the missing funds, the Minister of Finance, Wale Odun, allegedly responded that he was acting on the AGF’s instructions. However, the AGF firmly denied this claim, questioned the validity of the suit, and accused the state of contempt for disobeying a Supreme Court judgment issued on July 11, 2024.
Fagbemi argued that Osun’s reliance on a 2004 Supreme Court ruling in AG Lagos State v. AG Federation was misplaced. He maintained that the facts in that case were significantly different from the present situation.
In a counter-affidavit sworn by the Special Assistant to the President, Taye Oloyede, the AGF asserted that neither he nor the Finance Minister ordered the withholding of Osun’s local government funds. Oloyede, who was present during a May 22, 2025, meeting, testified that the Finance Minister denied receiving any such directive.
The affidavit noted that Osun did not claim that the President issued an order or present any evidence of an intentional withholding of funds. Oloyede explained that local government allocations are paid directly by the Ministry of Finance, provided the councils submit their account details.
He stated that the current LG administrators in Osun were elected under the previous APC-led government and would remain in office until October 2025. The affidavit also revealed that Osun failed to show that these councils had submitted their banking details to the Ministry.
Oloyede further argued that the Osun State Government lacked both the legal authority and the consent of the local councils to sue on their behalf. He said the state intended to redirect the LG funds to health and education projects—an action that contravened the Supreme Court’s earlier judgment barring states from managing LG finances.
The AGF also noted that a previous Federal High Court ruling in favour of the Osun State Governor had been overturned by the Court of Appeal.
Fagbemi maintained that Osun had violated the Supreme Court’s July 2024 ruling in AGF v. Attorney General of Abia State & Others, which required LG allocations to be paid directly to the councils and prohibited state interference. He claimed that despite acknowledging this ruling, Osun continued to receive and spend LG funds between July 2024 and February 2025.
Describing the lawsuit as a calculated move to justify continued violation of the Supreme Court’s order, the AGF accused Osun of “egregious contempt” and called on the court to enforce judicial accountability.
“The only way to vindicate the authority of this court,” he argued, “is to order the plaintiff to return all LG funds received between July 2024 and February 2025 to the Minister of Finance, who will then remit them to the appropriate local governments.”
In a five-pronged preliminary objection, the AGF contended that Osun lacked the legal standing to bring the case. He argued that the state had no right to sue on behalf of LGs, no authority to appeal the Supreme Court’s ruling, and had not raised a genuine constitutional dispute to justify invoking the court’s original jurisdiction under Section 232(1) of the Constitution.
Fagbemi emphasized that only local governments—not state governments—have the legal capacity to challenge the non-release of their allocations. He described Osun’s action as a self-assigned “watchdog” role, which it had no power to assume.
“If any LG has been wrongly deprived of its funds,” he concluded, “it is the council itself—not the state government—that has the right to sue.”
Meanwhile, it was confirmed that the Osun State Government has filed to withdraw the suit. However, Chief Olujimi explained that the matter remains before the Supreme Court until the application for withdrawal is formally heard in September.
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