The Supreme Court has censured the Federal Government for unlawfully withholding Osun State’s local government allocations, while also faulting the state government for filing the suit without proper authorisation from the councils.
In a majority judgment, the apex court declared that the Attorney General of Osun State lacked the legal authorityto sue on behalf of the 30 councils, noting that only elected and inaugurated local government officials could initiate such actions.
However, the court made it clear that the Federal Government’s seizure of the funds was unconstitutional, describing the move as a “grave breach of the 1999 Constitution.”
Delivering the lead judgment, Justice Mohammed Idris stated, “The hand of the Federal Government was soiled in its decision to unjustly withhold funds. Allocations must henceforth be directly channeled to local accounts.”
The court also dismissed allegations of contempt brought by the Attorney-General of the Federation against Osun State, observing that the FG itself was “in more contempt… by not paying the fund as required by law.”
A minority judgment by Justice Emmanuel Agim disagreed with the majority on the authority of the Osun Attorney General but affirmed that the Federal Government’s action was improper and capable of crippling council operations.
Background of the Case
The case, Suit No. I/1149/25, was filed on September 26, 2025, by the Attorney General of Osun State and the Osun State Local Government Service Commission against UBA Plc, seeking interim protection over statutory local government allocations.
SaharaReporters’ review of data from the Federal Allocation Account Committee shows that as of August 2025, the Federal Government had withheld ₦73.7 billion meant for Osun’s 30 councils. This includes allocations from March to August 2025, with monthly disbursements ranging from ₦11.2 billion to ₦14 billion.
The dispute reportedly arose after local government elections held in February 2025, a move criticised by the ruling All Progressives Congress, which oversees the disbursement of funds to states and councils.
Earlier, the High Court of Justice, Oyo State, had issued an interim order restraining UBA from releasing the local government funds, citing the urgency of the matter and potential irreparable harm to the councils.
Justice A.L. Akintola had ruled that the claimants had established sufficient grounds for urgent intervention, granting the ex-parte interim injunction sought by the state government.
As of now, the Osun State Government has not commented on the Supreme Court’s ruling or indicated its next steps.
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