The Supreme Court is set to announce its judgment on Tuesday, October 14, 2025, in a legal battle between the Osun State Government and the Federal Government concerning the withholding of local government funds.
This dispute centers on Osun State’s challenge against the Federal Government’s decision to withhold funds intended for local councils, particularly those chaired by elected officials from the All Progressives Congress (APC), whose legitimacy is disputed by the Peoples Democratic Party (PDP)-led state government.
Following local government elections in October 2022, APC candidates emerged victorious. However, the newly elected PDP-led government questioned the legitimacy of these elections, citing irregularities and ongoing legal disputes.
Conflicting court rulings regarding the validity of the APC-elected chairmen have resulted in a constitutional dilemma over local council control. In response, the Federal Government, through the Attorney-General of the Federation (AGF) and the Central Bank of Nigeria (CBN), withheld local government funds earmarked for Osun State.
Osun State has alleged that the AGF intended to release these funds directly to the contested APC chairmen, bypassing the state government. Consequently, Osun filed a lawsuit at the Supreme Court, seeking to prevent the AGF from distributing funds to what it termed “illegitimate” council officials.
Osun’s Attorney General, represented by Musbau Adetumbi (SAN), contended that the AGF must adhere to prior court rulings that supported the PDP’s position. Conversely, the AGF, represented by Akin Olujimi (SAN), argued that the APC chairmen were legitimately elected and entitled to the funds.
The Supreme Court had reserved judgment in October 2025, with the forthcoming decision expected to clarify the constitutional powers of state governments over local councils.
On October 3, SaharaReporters reported that the Supreme Court would hear the case on October 7, 2025. Adetumbi emphasized the importance of respecting the court’s authority, stating:
“Our contention is that even those who paid the money knew the matter was already before the court. They should have respected the Supreme Court by holding on to the money. Let the Supreme Court speak; everybody will be happy, but for you to pay just like that is not acceptable.”
Ahead of the hearing, the Oyo State High Court in Ibadan extended its Order of Interim Injunction against the United Bank for Africa (UBA), maintaining a no-debit restriction on 30 bank accounts holding the withheld Osun local government allocations.
Justice Ladiran Akintola explained that the extension was necessary to ensure all parties involved, including the Attorney-General of Osun State and the Osun State Local Government Service Commission, received a fair hearing.
Counsel for the UBA was absent, while counsel for the court-sacked APC council chairmen, led by Kazeem Gbadamosi, SAN, attended the proceedings after filing applications for joinder and jurisdictional challenges.
Adetumbi maintained the ex-APC council chairmen lacked the legal standing in the case, asserting:
“The ex-LG chairmen remain strangers to the case since their application for joinder has not yet been decided upon by the court.”
He requested time to review recent applications. Gbadamosi countered, arguing his clients were directly affected by the court’s Interim Injunction and challenged the court’s authority to extend orders amidst jurisdictional questions.
Additionally, the court admitted a further affidavit from Mrs. Aluko Rachael Abidemi, Head of Local Government Administration in Boluwaduro LGA, alleging attempts by individuals to siphon funds despite an existing court order.
