The Osun State Government has dragged the Federal Government before the Supreme Court over the alleged illegal withholding of statutory allocations meant for the state’s 30 local government councils.
The state, through its Attorney-General and a team of senior lawyers led by Mike Ozekhome (SAN) and Musibau Adetunbi (SAN), filed a fresh suit on Monday, accusing the Attorney-General of the Federation (AGF), Lateef Fagbemi (SAN), of acting unconstitutionally by refusing to release the funds since March 2025.
The state government is seeking an order from the apex court to compel the Federal Government to release the seized allocations and also issue a perpetual injunction stopping any future withholding of local government funds.
The case centres on the legitimacy of local government officials in Osun State. In February 2025, elections were held to fill chairmanship and councillorship positions across the 30 LGAs. These elections were backed by court judgments affirming their validity.
However, the AGF, in a letter dated March 26, 2025, advised that local government allocations be withheld, citing what he called a “local government crisis” in the state. This advice, according to Osun State, was given in disregard of existing judgments of the Federal High Court in Osogbo (November 30, 2022) and the Court of Appeal (June 13, 2025), which upheld the legitimacy of the February elections and nullified previous local government polls conducted in October 2022 under the past administration.
In its legal arguments, Osun is asking the Supreme Court to declare that the AGF has no constitutional authority to withhold statutory allocations to local governments, especially when valid court judgments exist confirming the lawful status of elected officials.
The state argues that the AGF’s actions amount to an abuse of power and a violation of Section 287 of the 1999 Constitution, which mandates public officials to comply with the rulings of competent courts.
“The seizure, suspension, withholding and/or refusal to pay the allocations and revenues due to the constituent local government councils of the plaintiff state… is unconstitutional, unlawful, wrongful and ultra vires the powers of the defendant.”
The suit also seeks the immediate release of all withheld funds directly into the accounts of the local government councils and asks the court to stop the Federal Government from repeating such actions in the future.
The Osun legal team presented five issues for determination by the Supreme Court. Among them is whether the AGF is bound by the decisions of the Federal High Court and the Court of Appeal, and whether his directive of March 26, 2025, to stop the payment of funds still holds legal ground in light of the Court of Appeal ruling.
In addition to the Supreme Court case, Osun has also filed a separate suit at the Federal High Court in Osogbo, challenging the Chief Judge’s decision to transfer an earlier case on the same matter to Abuja, where it is now being heard by a vacation judge.
The Osun State Government is concerned that continuing with the case in Abuja could lead to conflicting judgments since the same subject matter is now before the Supreme Court, which is the highest court in the country.
In an affidavit filed in support of its suit, the Permanent Secretary of the Ministry of Local Government and Chieftaincy Affairs, Olufemi Akande Ogundun, described the withholding of funds as “an affront to the rule of law” and urged the courts to treat the matter with urgency.
He cited legal precedents such as A.G. Kano State v. A.G. Federation (2007) and Revenue Mobilisation Allocation and Fiscal Commission v. A.G. Rivers State (2023), which addressed similar issues around the powers of the Federal Government in handling funds meant for lower tiers of government.
The Osun Government also accused the AGF of causing unnecessary delay in the legal process. It said the AGF took over 80 days before responding to the originating court processes, only to suddenly file an “affidavit of urgency” on August 13, 2025.
The state further argued that the decision to move the earlier case from Osogbo to Abuja appears biased, stating that it “casts the lot of the court with the AGF” and could damage public trust in the judiciary.
The Supreme Court is expected to review the submissions in the coming weeks. Legal observers say the case could set an important precedent on whether the Federal Government can lawfully interfere in how local government funds are disbursed — especially when state elections and court rulings have validated the current leadership at the local level.
