Lateef Fagbemi, the attorney-general of the federation (AGF), has asked the Supreme Court to order the Osun State Government to refund seven months’ worth of local government allocations to the minister of finance.
The request was made in response to a suit filed by Osun State, marked SC/CV/379/2025, which alleged that the federal government had withheld the statutory allocation due to its 30 local government councils for March 2025.
The suit, instituted by the Osun State Attorney-General, named the AGF as the sole defendant and claimed that the minister of finance, Wale Edun, attributed the non-release of funds to instructions from the AGF. However, Fagbemi, through his counsel Akin Olujimi, denied the allegation.
In a counter-affidavit deposed by Taye Oloyede, special assistant to the president, the AGF asserted that neither he nor the finance minister ordered the withholding of funds. Oloyede stated that “on May 22, 2025, in my presence, the minister of finance denied ever receiving such instructions.”
He argued that Osun State had not provided evidence that the local government allocations were deliberately withheld, noting that “direct payment of allocations to LGAs requires only that they submit account details to the ministry of finance.” According to the AGF, Osun failed to demonstrate that its LGAs had complied with this requirement.
The AGF further contended that Osun lacked the legal authority to bring the case on behalf of the local governments.
“The plaintiff failed to show that it had the legal authority or consent of the LGAs to initiate the lawsuit,” the affidavit read.
The counter-affidavit also accused Osun State of attempting to use the LG funds for state-level health and education initiatives, in violation of a Supreme Court judgment which prohibits state governments from managing local government finances.
Oloyede pointed to a previous ruling by the Federal High Court in favour of the Osun governor, which was later overturned by the Court of Appeal.
He noted that despite the Supreme Court’s July 11 judgment banning states from controlling LG funds, “Osun continued to receive and spend LG allocations from July 2024 to February 2025,” calling the action an “egregious contempt.”
“The only way to vindicate the authority of this court is to order the plaintiff to pay back all LG funds collected between July 2024 and February 2025,” the AGF stated.
“These should be remitted to the minister of finance for onward transfer to the respective local governments.”
Fagbemi also filed a preliminary objection to the suit, arguing: “The plaintiff is not entitled to be heard due to contempt.”
He added, “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.
” If any LG has been wrongly deprived of its funds, it is the council itself, not the state government, that has the right to sue.”
It was gathered that Osun has since applied for the withdrawal of the suit. The Supreme Court is expected to hear the formal application in September.
