The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), has asked the Supreme Court to direct the Osun State Government to return seven months of local government allocations to the Federal Ministry of Finance.
The demand was made in a response filed on behalf of the AGF by his legal representative, Chief Akin Olujimi (SAN), in reaction to a suit instituted by the Osun State Government, which accused the Federal Government of withholding its statutory allocation for March 2025 meant for its 30 local government areas.
The case, registered as SC/CV/379/2025, lists the AGF as the sole defendant. Osun State claimed that when it reached out to the Federal Ministry of Finance over the non-release of the funds, the Minister of Finance, Wale Odun, reportedly cited the AGF’s instruction as the reason for the action.
In his defence, however, Fagbemi rejected this assertion and maintained that the state had no legal grounds to file the suit, accusing it of flouting a Supreme Court ruling delivered on July 11, 2024.
The AGF criticised Osun’s reliance on a previous Supreme Court ruling in the 2004 AG Lagos State v. AG Federation case, arguing that the facts in the current dispute were not comparable.
In a sworn affidavit by Taye Oloyede, a Special Assistant to the President, it was asserted that neither the AGF nor the Finance Minister gave any order to withhold the allocations due to Osun’s local councils.
Oloyede, who was reportedly present at a meeting on May 22, 2025, said the Minister of Finance denied issuing or receiving any directive to block the funds.
The affidavit also stated that Osun did not accuse the President of being involved in the matter, nor did it supply any evidence proving that the allocations were deliberately denied.
It was further explained that for local governments to receive direct disbursements from the Ministry of Finance, they are required to submit their bank account details. The officials in Osun’s local councils, according to the affidavit, were elected under the former APC-led administration and are expected to remain in office until October 2025.
The AGF’s team argued that the state failed to show that its local governments submitted the required information and questioned the legal capacity of the Osun State Government to sue on behalf of the councils.
Oloyede also alleged that the state planned to channel the local government funds into health and education programmes at the state level—an action he said goes against the Supreme Court’s judgment forbidding states from handling LG finances.
He also highlighted that a previous ruling from a Federal High Court, which supported Osun’s position, was reversed by the Court of Appeal.
Fagbemi maintained that Osun had disobeyed the Supreme Court’s July 2024 judgment in AGF v. Attorney General of Abia State & Others, which mandated that local government funds be paid directly to the councils and not managed by state governments.
He alleged that despite being listed as the 29th defendant in that case and acknowledging the judgment, Osun State continued to collect and disburse local government funds from July 2024 to February 2025.
The AGF condemned the current legal action as a deliberate move to secure judicial approval to continue disobeying the Supreme Court’s decision.
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 containing five main arguments, the AGF insisted that Osun lacked the legal right to be heard, had no basis for appeal, and that the case did not fall within the original jurisdiction of the court as outlined in Section 232(1) of the Constitution.
“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.”
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