Supreme Court Delays Decision in Osun Government’s High-Stakes Fight Over Withheld Local Government Funds

Supreme Court reserves judgment in Osun govt’s suit over withheld LG allocations

On Tuesday, the Supreme Court postponed its decision regarding a lawsuit initiated by the Osun State Government. The suit demands that the Federal Government release statutory allocations allegedly withheld from the state’s Local Government Councils (LGCs).

A panel of seven justices, led by Justice Uwani Abba-Aji, reserved their verdict after hearing detailed arguments from both the Attorney General of the Federation (AGF) and the Attorney General of Osun State.

Chief Akin Olujimi, SAN, represented the Federal Government, while Mr. Musibau Adetunbi, SAN, appeared on behalf of Osun State.

The case, identified as SC/CV/775/2025, seeks ten specific court orders, including a declaration that the AGF is constitutionally mandated to enforce and comply with existing court rulings that recognize the legitimacy of democratically elected local government councils in Osun State, following elections conducted on February 22, 2025.

Osun State argued that the AGF breached binding judgments from both the Federal High Court and the Court of Appeal, delivered on November 30, 2022, and June 13, 2025, respectively, by unlawfully redirecting statutory funds intended for the 30 LGCs to candidates favored by the AGF.

The state further requested a declaration that the AGF lacked any legal authority to withhold, suspend, or seize monthly allocations, revenues, or other financial resources allocated to the LGCs, emphasizing that these councils were duly elected through legitimate democratic processes.

Moreover, Osun sought an injunction to prevent the AGF from releasing statutory allocations to the dismissed All Progressives Congress (APC) local government chairmen and councillors. These officials’ elections, held on October 15, 2022, were nullified by valid and uncontested rulings from the Federal High Court and the Court of Appeal.

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Additionally, the state petitioned the Supreme Court to mandate the immediate release of all withheld monthly allocations and revenues to the rightful Local Government Councils, with funds to be deposited directly into accounts opened in the names of the duly sworn-in officials as of February 23, 2025.

During his submission, Adetunbi, SAN, informed the court that despite ongoing litigation, the AGF issued a directive on March 26 instructing that the withheld funds be paid to the previously removed APC chairmen and councillors.

“My Lords, even while this matter was before the court, the defendant attempted to undermine the proceedings by releasing funds to one of the disputing parties. Payments were made through the Central Bank of Nigeria, but we successfully obtained an order to halt the disbursement,” Adetunbi stated, urging the court to grant all the reliefs sought.

On the other hand, Olujimi, SAN, representing the AGF, urged the Supreme Court to dismiss the suit, citing lack of jurisdiction and abuse of court process.

He contended that the dispute is fundamentally a political tussle between the APC and the PDP over control of local government areas in Osun, rather than a constitutional matter warranting the Supreme Court’s original jurisdiction.

“The APC local government officials hold a valid three-year tenure ending on October 22. However, the state has hindered their operations by filing multiple lawsuits aimed at frustrating their duties. This issue does not fall within the original jurisdiction of this court as defined by the Constitution. Furthermore, the suit fails to establish any cause of action, and the plaintiff lacks standing while engaging in an abuse of judicial process,” Olujimi argued.

After hearing the submissions, the panel chaired by Justice Abba-Aji announced that the court would inform the parties of the judgment date in due course.

Earlier in the session, the Supreme Court dismissed a related case, SC/379/2025, which Osun State had filed before the AGF’s directive to release the withheld funds to the APC council officials.