Osun Must Refund Seven Months’ LG Allocations, AGF Tells Supreme Court

The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), has asked the Supreme Court to order the Osun State Government to refund seven months’ worth of local government allocations to the Minister of Finance.

The request was made in a response filed on behalf of the AGF by his lead counsel, Chief Akin Olujimi (SAN), in a suit originally instituted by the Osun State Government through its Attorney General.

Osun had dragged the AGF to the apex court as sole defendant, alleging that the Federal Government unlawfully withheld statutory allocations due to its 30 local government councils for the month of March 2025.

In the suit, marked SC/CV/379/2025, the Osun Government claimed that when it queried the Federal Ministry of Finance about the delay, the Minister of Finance, Wale Edun, reportedly stated he was acting on the AGF’s directive.

However, the AGF denied the allegation, challenging both the legitimacy of the suit and the state’s compliance with a previous Supreme Court ruling delivered on July 11, 2024.

Fagbemi argued that Osun’s reliance on the 2004 Supreme Court decision in AG Lagos State v. AG Federation—which compelled the release of withheld funds to Lagos—was misplaced and irrelevant in the current context.

In a counter-affidavit sworn by Taye Oloyede, Special Assistant to the President, the AGF maintained that neither he nor the Minister of Finance gave any directive to withhold Osun’s LG funds. Oloyede testified that on May 22, 2025, the Minister of Finance, in his presence, denied ever receiving such instructions.

The affidavit also noted that Osun never alleged that the President had ordered the withholding of the funds, nor did it provide proof that the allocations were deliberately blocked.

Instead, Oloyede stated that local government allocations are only paid directly when LG councils submit their account details to the Ministry of Finance—something Osun failed to demonstrate.

He further claimed that the current LG administrators in Osun were elected under the previous APC-led government and remain in office until October 2025. According to him, the state failed to prove that it had the legal authority—or the consent of the LGs—to file the lawsuit.

Moreover, the affidavit revealed that Osun intended to use the LG funds to support state-level health and education projects, in direct violation of the July 2024 Supreme Court judgment, which prohibits state governments from controlling or disbursing local government funds.

The AGF also cited an earlier ruling by a Federal High Court in favour of the Osun State Government that was later overturned by the Court of Appeal.

Fagbemi emphasized that Osun was in breach of the Supreme Court’s July 2024 decision in AGF v. Attorney General of Abia State & Others, which declared that LG funds must be paid directly to local councils and not funneled through state governments.

In that case, Osun—listed as the 29th defendant—had acknowledged the ruling but allegedly continued to receive and spend LG funds between July 2024 and February 2025.

Describing the state’s current lawsuit as a strategic ploy to sidestep judicial authority, Fagbemi called the move “egregious contempt” and urged the Supreme Court to assert its authority.

“The only way to vindicate the authority of this court,” he argued, “is to compel Osun to refund all LG funds received from July 2024 to February 2025. These funds should be remitted to the Minister of Finance for disbursement to the respective local councils.”

In a five-ground preliminary objection, the AGF further contended that:

1. Osun State has no right to be heard due to its contempt of court.

2. The state lacks the legal standing to appeal a Supreme Court decision.

3. The suit fails to raise a genuine dispute to trigger the Supreme Court’s original jurisdiction under Section 232(1) of the Constitution.

4. Osun has no locus standi to sue on behalf of local governments.

5. Only local governments—not states—can challenge the non-payment of their allocations.

Fagbemi accused the state of improperly appointing itself as a “watchdog” over LG funds, despite lacking constitutional authority to litigate on their behalf.

“If any local government believes it has been denied its rightful funds,” he concluded, “it must pursue its own legal remedy—not the state government acting in its name.”

Meanwhile, it has been gathered that the Osun State Government has withdrawn the suit. However, Chief Olujimi confirmed that the matter remains technically before the court, pending a formal hearing of the withdrawal application scheduled for September.