AGF Asks Apex Court to Order Osun to Refund Seven Months’ LG Allocations

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

The demand was outlined in a response submitted through Fagbemi’s legal counsel, Chief Akin Olujimi (SAN), as part of ongoing proceedings in a suit filed by the Osun State Government through its Attorney General.

Osun State had approached the Supreme Court as the plaintiff in a suit marked SC/CV/379/2025, naming the AGF as the sole defendant. 

The state alleged that the Federal Government had unlawfully withheld its March 2025 statutory allocations meant for the state’s 30 local government councils.

According to court filings, the state claimed that when it inquired about the withheld funds, the Minister of Finance, Wale Odun, reportedly stated he was acting under the AGF’s instruction.

However, the AGF refuted the allegations and challenged the admissibility of the case. 

He argued that Osun had flouted a Supreme Court judgment delivered on July 11, 2024 and therefore had no legal standing to initiate the lawsuit.

Fagbemi also criticised the state’s reliance on 2004 legal precedent in AG Lagos State v. AG Federation, stating that the circumstances in that case were materially different.

In a counter-affidavit sworn by Taye Oloyede, Special Assistant to the President, the AGF maintained that neither he nor the Finance Minister had issued any directive to withhold Osun’s local government funds.

Oloyede stated that on May 22, 2025, he was present when the Minister of Finance categorically denied ever receiving such instructions.

According to the affidavit, Osun State failed to allege any involvement by the President or submit evidence showing deliberate efforts to block the release of the allocations.

Oloyede explained that local government accounts must be submitted directly to the Finance Ministry for payments to be processed, adding that the local government officials currently in place were elected under the previous APC administration and would remain in office until October 2025.

He also noted that the state had not demonstrated that its local councils had submitted the required account information.

Oloyede further argued that the state lacked legal authority to file the suit on behalf of the local governments and alleged that the funds were intended to support state-run health and education projects.

He referenced an earlier ruling by a Federal High Court that favoured Osun State but said the judgment had already been set aside by the Court of Appeal.

Fagbemi stressed that Osun was in violation of the July 11, 2024, Supreme Court verdict in AGF v. Attorney General of Abia State & Others, which mandated direct payment of LG allocations and barred state governments from accessing or distributing such funds.

Fagbemi dismissed the present suit as deliberate effort by the state to obtain legal cover to continue disregarding the Supreme Court’s judgment.

He called it an “egregious contempt” and asked the court to enforce judicial accountability.

“The only way to vindicate the authority of this court,” he stated, “is to order the plaintiff to pay back all LG funds collected between July 2024 and February 2025. These should be remitted to the Minister of Finance for onward transfer to the respective local governments.”

In a preliminary objection consisting of five legal grounds, the AGF argued that Osun lacked the legal right to be heard in the matter due to its contemptuous conduct and had no basis to sue or appeal the earlier Supreme Court decision.

“The plaintiff is not entitled to be heard due to contempt. The plaintiff has no right of appeal against the Supreme Court’s decision. The case does not present a genuine dispute to trigger the court’s original jurisdiction under Section 232(1) of the Constitution. The plaintiff has no locus standi to sue on behalf of local governments. Only LGs—not state governments—can seek redress for unpaid allocations.”

The AGF stressed that Osun State had improperly appointed itself as a ‘watchdog’ over LG funds, despite having no authority to litigate on their behalf.

“If any LG has been wrongly deprived of its funds,” he concluded, “it is the council itself—not the state government—that has the right to sue.”