Drama Unfolds: Attorney General Drags Osun Govt To Supreme Court Over LG Funds Scandal

The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), has approached the Supreme Court, urging it to compel the Osun State Government to refund seven months’ worth of local government (LG) allocations to the Federal Ministry of Finance. He accused the state of misappropriation and contempt of court.

This demand forms part of a response filed by Fagbemi’s legal representative, Akin Olujimi (SAN), in reaction to a suit earlier filed by the Osun State Government. The suit, marked SC/CV/379/2025, alleged that the Federal Government wrongfully withheld the state’s March 2025 LG allocation.

Osun’s Attorney General had claimed the 30 local councils in the state were denied their March funds, blaming the Minister of Finance, Wale Odun, who allegedly acted under AGF Fagbemi’s orders.

However, in a counter-affidavit deposed by Taye Oloyede, Special Assistant to the President on Legal Matters, the AGF denied issuing any such directive. He noted that during a May 22, 2025 meeting, the Finance Minister also refuted the allegation.

The counter-affidavit emphasized that LG fund disbursement depends on verified account details submitted by each local government—a step Osun allegedly neglected.

Furthermore, the AGF accused the state of planning to channel LG allocations into state-led education and healthcare programmes—an act that directly contravenes a July 11, 2024 Supreme Court ruling that bars state governments from spending LG funds.

Fagbemi challenged Osun’s reliance on a 2004 Lagos vs. FG precedent, stating it had no bearing on the current matter. He argued that Osun lacked legal standing to file the case on behalf of its LGs, especially without proof of consent or submission of financial data by the councils.

He also pointed out that the existing local government chairmen in Osun were elected under the previous APC administration and remain in office until October 2025.

Fagbemi further reminded the court that Osun had been among the defendants in the 2024 landmark ruling that stopped state control over LG funds. Despite acknowledging the judgment, Osun allegedly continued collecting and disbursing LG funds from July 2024 to February 2025.

Describing the state’s legal action as a calculated attempt to “legitimize ongoing defiance,” the AGF urged the Supreme Court to enforce its earlier ruling by ordering Osun to refund all improperly accessed LG funds.

“The court must assert its authority by directing Osun to repay allocations received from July 2024 to February 2025. These funds should be returned to the Ministry of Finance for disbursement to the appropriate LG authorities,” Fagbemi stated.

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

1. Osun has no right to be heard while in contempt of court.

2. The state has no grounds to appeal the Supreme Court’s judgment.

3. The case does not qualify as a genuine dispute under Section 232(1) of the Constitution.

4. Osun lacks locus standi to act on behalf of local governments.

5. Only LGs—not state governments—can sue over unpaid allocations.

He concluded that Osun State had overstepped its authority by attempting to “act as a self-appointed guardian” of local government finances.

Meanwhile, reports indicate that Osun has filed an application to withdraw the suit. Although AGF counsel Olujimi (SAN) confirmed this development, he emphasized that the case will remain before the court until the withdrawal application is formally reviewed in September.