The Supreme Court has condemned the Federal Government for unlawfully withholding Osun State’s local government allocations, while also criticising the Osun State Government for filing a lawsuit on behalf of the 30 local councils without proper authorization.
In its majority judgment, the Court ruled that the Osun Attorney General lacked the legal authority to sue on behalf of the local governments. Justice Mohammed Idris, who delivered the lead judgment, stated that only the elected and inaugurated local government officials have the legal standing to initiate such actions.
However, despite faulting the state on procedural grounds, the Court declared that the Federal Government acted in clear violation of the 1999 Constitution by seizing the funds. Justice Idris described the withholding of allocations as “constitutionally indefensible,” adding that “the hand of the Federal Government was soiled” in its decision. He ordered that local government allocations must be paid directly into the councils’ accounts.
The Supreme Court also dismissed the Attorney General of the Federation’s accusation that Osun State was in contempt, instead ruling that the AGF himself was “in more contempt” for failing to release the funds as required by law.
In a minority judgment, Justice Emmanuel Agim disagreed with the majority’s view, insisting that the Osun Attorney General was within his rights to file the suit. He strongly criticized the Federal Government’s actions, saying they were “in bad taste” and capable of crippling local government operations.
₦73.7 Billion Withheld Over Six Months
Data reviewed earlier by SaharaReporters from the FAAC reports shows that Osun State was owed a total of ₦73.7 billion in local government allocations between March and August 2025.
March: ₦11.9bn
April: ₦11.2bn
May: ₦11.7bn
June: ₦12.1bn
July: ₦12.8bn
August: ₦14bn
The funds were withheld following disputes that arose after the February local government elections in Osun, which the APC-controlled Federal Government described as flawed.
Earlier in September, a High Court in Ibadan issued an interim order preventing the United Bank for Africa (UBA) from releasing the statutory allocations of the 30 LGAs in Osun State. The order, granted by Justice A.L. Akintola, was based on a request from the Osun State Government and the State Local Government Service Commission seeking temporary protection over the funds.
Justice Akintola ruled that the court needed to intervene urgently to prevent “irreversible harm” to the claimants and granted the interim injunction pending further hearings.
As of now, the Osun State Government has not issued an official response to the Supreme Court ruling or announced its next steps.
The controversy surrounding the withheld funds remains one of the most heated federal–state disputes of 2025, with significant political and financial implications for the state’s 30 local councils.
