AGF drags Osun to Supreme Court over alleged LG fund mismanagement

Attorney-General of the Federation, Lateef Fagbemi, has urged the Supreme Court to compel the Osun State Government to refund seven months’ worth of local government allocations back to the Federal Ministry of Finance.

This request comes as a counter-response to a suit filed by the Osun government (marked SC/CV/379/2025), in which it accused the federal government of failing to release statutory allocations due to its 30 local government councils for the month of March 2025.

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The suit was filed by Osun’s attorney-general, naming the AGF as the sole defendant.

In its claim, Osun stated that the Minister of Finance, Wale Edun, told the state he was acting on the directive of the AGF when the funds were withheld.

But Fagbemi, represented by legal counsel Akin Olujimi, denied the allegation.

A counter-affidavit filed by Taye Oloyede, special assistant to the president, maintained that neither Fagbemi nor the Finance Minister approved any suspension of Osun’s LG funds.

He noted that Edun, in a meeting held on May 22, 2025, denied ever receiving instructions to withhold the funds.

The AGF further argued that Osun had failed to provide credible evidence showing that the allocations were deliberately withheld.

According to Oloyede, local government areas are required to submit their account details directly to the Ministry of Finance to receive funds, but Osun failed to demonstrate that its LGAs complied with this process.

Oloyede also claimed that the Osun State Government lacked the legal authority to sue on behalf of the LGAs, asserting that it had not shown proof of having obtained their consent.

The affidavit went on to allege that Osun had plans to divert the local government allocations for state-level health and education programmes, which would violate a Supreme Court ruling barring states from managing LGA funds.

The AGF highlighted that despite a Supreme Court judgment on July 11, 2024, prohibiting states from tampering with LG funds, Osun allegedly continued to receive and utilize such funds between July 2024 and February 2025.

He described the act as “egregious contempt” of the court.

To uphold the authority of the judiciary, the AGF requested that the Supreme Court order Osun to refund all LG allocations collected during the seven-month period to the Minister of Finance for direct disbursement to the LGAs.

In a preliminary objection, the AGF argued that Osun had no legal standing to bring the suit, as Section 232(1) of the Constitution allows for the Supreme Court’s original jurisdiction only in genuine disputes.

He insisted that only local governments, not state governments, can seek redress for unpaid allocations, and Osun had no right of appeal against the apex court’s judgment.

Although Osun State has reportedly applied to withdraw the lawsuit, the Supreme Court is expected to formally hear the application in September.