Osun withheld LG allocations: State sues AGF at Supreme Court over unpaid funds to 30 councils, citing ignored court rulings and unconstitutional withholding
The Osun State Government has escalated its legal battle over the alleged unlawful withholding of local government allocations by filing a fresh suit at the Supreme Court against the Attorney-General of the Federation (AGF), Lateef Fagbemi (SAN).
The dispute concerns statutory allocations due to the state’s 30 local government councils, which the state claims have been withheld since March 2025, disrupting governance and service delivery at the grassroots level.
This fresh legal action, filed on Monday, comes months after the state government formally applied to withdraw an earlier case on the same matter.
In the new originating summons, Osun State, represented by its Attorney-General and a legal team led by eminent Senior Advocates of Nigeria Mike Ozekhome (SAN) and Musibau Adetunbi (SAN), is urging the apex court to compel the Federal Government to immediately release all the seized funds.
The state’s suit contends that the AGF disregarded subsisting judicial decisions, including a ruling by the Federal High Court, Osogbo, delivered on November 30, 2022, and a subsequent judgment by the Court of Appeal on June 13, 2025.
Both courts had affirmed the legitimacy of council chairmen and councillors who were elected on February 22, 2025.
Despite these rulings, the AGF, in a letter dated March 26, 2025, directed that the funds be withheld, citing the need to resolve a so-called “local government crisis.”
Osun State, however, argues that the appellate court ruling had already resolved the matter conclusively, effectively nullifying the October 2022 local government elections conducted under the previous administration.
The state is now seeking a range of legal remedies, including declarations that the AGF has no constitutional authority to seize local government funds, that his actions contravene valid court judgments, and that all withheld allocations be released directly into the accounts of the duly elected councils.
Additionally, Osun is requesting a perpetual injunction to prevent any future seizure of local government revenues.
The suit reads in part: “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.”
For the Supreme Court’s consideration, Osun State has raised five critical issues, including whether the AGF is constitutionally obligated under Section 287 of the 1999 Constitution (as amended) to enforce the rulings of the Federal High Court and the Court of Appeal, and whether the AGF’s March 26, 2025 directive to withhold funds can legally stand in light of the appellate judgment.
In parallel to the Supreme Court action, Osun has also filed another suit at the Federal High Court, Osogbo, challenging the Chief Judge’s decision to transfer an earlier case concerning the same funds to Abuja, where it would be heard by a vacation judge.
The state cautioned that proceeding with the Abuja case while the Supreme Court is yet to rule could result in conflicting judgments, further complicating the legal and administrative landscape.
In an accompanying affidavit, Olufemi Akande Ogundun, Permanent Secretary of the Ministry of Local Government and Chieftaincy Affairs, described the Federal Government’s actions as “an affront to the rule of law,” insisting that only the Supreme Court can provide a conclusive resolution on the constitutional questions involved.
Ogundun cited notable legal precedents, including A.G. Kano State v. A.G. Federation (2007) and RMAFC v. A.G. Rivers State (2023), which support the principle that federal authorities must respect judicial determinations regarding local government affairs.
The state further accused the AGF of manufacturing a sense of urgency, highlighting that he delayed responding to originating court processes for over 80 days before filing an affidavit of urgency on August 13, 2025.
Osun also criticized the Chief Judge’s transfer order, arguing that it “casts the lot of the court with the AGF” and could create a perception of bias, undermining public confidence in the judicial process.
As of now, no hearing date has been fixed for either the Supreme Court or the Federal High Court cases.
Meanwhile, the political dimension of the crisis has intensified. The All Progressives Congress (APC) in Osun State publicly accused Governor Ademola Adeleke of being responsible for the ongoing withholding of local government allocations.
In a strongly worded statement released on Monday, the party alleged that the governor has manipulated the leadership of the National Union of Local Government Employees (NULGE) to disrupt the operations of councils, creating administrative paralysis at the grassroots level.
Chief Kola Olabisi, Director of Media and Information for the APC in Osun, urged Governor Adeleke to stop disseminating misleading narratives about the inaccessibility of federal allocations.
He stated: “The governor appears to prioritize political expediency over the welfare of Osun citizens. Sponsoring a strike of council workers against your own administration is counterproductive and unethical.
“Such acts have led to the inability of traditional rulers and other grassroots beneficiaries to receive their statutory allowances and salaries.”
READ MORE: APC blames Adeleke for Osun withheld allocations