Osun Must Refund 7 Months Of LG Allocations – Fagbemi Tells Court

The Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, has asked the Supreme Court to compel the Osun State Government to refund seven months’ worth of local government allocations to the Federal Ministry of Finance.

The request was contained in a response filed by Fagbemi’s legal representative, Chief Akin Olujimi (SAN), in reaction to a suit instituted by the Osun State Government through its Attorney General. The suit, marked SC/CV/379/2025, accused the Federal Government of withholding statutory allocations meant for Osun’s 30 local government councils for March 2025.

Osun alleged that the Minister of Finance, Wale Odun, withheld the funds based on directives from the AGF. However, Fagbemi denied the claim and argued that the state government was in contempt of a Supreme Court ruling delivered on July 11, 2024.

In a counter-affidavit filed by the Special Assistant to the President, Taye Oloyede, the AGF’s office maintained that neither the AGF nor the Finance Minister ordered the withholding of the funds. Oloyede testified that Edun denied receiving any such instruction during a meeting held on May 22, 2025.

The AGF also argued that the state government failed to prove that the local governments submitted the required bank account details to the Ministry of Finance. Furthermore, he noted that the officials currently running Osun’s local councils were elected under the former APC-led administration and are still legally in office until October 2025.

Oloyede added that Osun lacked the legal right to institute the suit on behalf of the LGAs and accused the state of intending to divert the allocations to fund state-run health and education programmes, an action he said violates the Supreme Court’s previous ruling, which forbids state governments from managing local government funds.

According to Fagbemi, Osun State has acted in direct defiance of the Supreme Court’s July 2024 judgment in AGF v. Attorney General of Abia State & Others, which ordered that LG allocations be paid directly to LG accounts without state interference. He pointed out that Osun, identified as the 29th defendant in that case, had acknowledged the ruling but continued to receive and disburse LG funds from July 2024 to February 2025.

Describing the lawsuit as a deliberate attempt to circumvent the Supreme Court’s authority, Fagbemi called the action “egregious contempt” and urged the court to assert its judicial power.

“To uphold the authority of this court,” he said, “Osun State must refund all LG funds received between July 2024 and February 2025. These funds should be remitted to the Minister of Finance for direct disbursement to the rightful local governments.”

In a five-point preliminary objection, the AGF further argued that:

Osun State is in contempt and should not be heard.

The state has no right of appeal against the Supreme Court’s judgment.

The case does not qualify for the court’s original jurisdiction under Section 232(1) of the Constitution.

Osun lacks the legal standing to sue on behalf of LGAs.

Only local governments, not the state have the right to seek redress over unpaid allocations.

Fagbemi concluded that Osun had assumed the role of an unlawful “watchdog” over LG funds, contrary to constitutional provisions.

“If any local government believes its funds have been wrongly withheld,” he stated, “it is that council not the state governmentbthat must initiate legal action.”

Meanwhile, it has emerged that the Osun State Government has withdrawn the suit. Confirming this development, Chief Olujimi said the matter remains in court pending formal hearing of the withdrawal application, scheduled for September.

COURTESY: insight links.net

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