AGF asks Osun to refund 7 months LG allocations

The Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, has asked the Supreme Court to mandate the Osun State Government to return local government funds it allegedly received between July 2024 and February 2025.

This was stated in a response filed by Fagbemi’s counsel, Chief Akin Olujimi (SAN), to a suit initiated by the Osun State Government through its attorney general. Osun had sued the AGF, accusing the Federal Government of withholding statutory allocations to its 30 local governments for March 2025.

In suit number SC/CV/379/2025, Osun claimed the Minister of Finance, Wale Odun, attributed the non-release of the funds to directives from the AGF.

Fagbemi denied the claim and argued that the state had disobeyed a Supreme Court ruling issued on July 11, 2024. He dismissed Osun’s reliance on the 2004 AG Lagos v. AG Federation judgment, which had ordered Lagos’ withheld funds released, stating the precedent was inapplicable.

In a counter-affidavit sworn by Taye Oloyede, Special Assistant to the President, the AGF asserted that neither he nor the finance minister instructed a freeze on Osun’s LG allocations. According to Oloyede, the finance minister had, on May 22, 2025, denied ever receiving such instructions, with Oloyede present.

The affidavit pointed out that Osun had neither claimed the President gave such a directive nor provided proof that the funds were deliberately blocked. It further maintained that allocations can only be sent directly to LGs once they provide their bank account details to the Ministry of Finance.

Oloyede also noted that the current LG leadership in Osun was elected during the previous APC-led administration and would remain in office until October 2025. He said the state government failed to prove that the councils had submitted their account details to the finance ministry.

He further contended that Osun lacked the legal standing or authorization from its local governments to bring the suit. The affidavit stated the state intended to use the LG allocations for education and healthcare programmes—an approach contrary to the Supreme Court ruling barring state interference in LG funds.

The AGF argued that Osun’s approach violated the July 11, 2024, judgment in AGF v. Attorney General of Abia State & Others, which required direct remittance of LG allocations and forbade state governments from receiving or managing such funds.

Despite being Defendant 29 in that case and acknowledging the ruling, Osun allegedly continued accessing LG funds between July 2024 and February 2025. Fagbemi described the suit as an attempt to gain legal cover for breaching the Supreme Court’s decision.

He said:“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. These should be remitted to the Minister of Finance for onward transfer to the respective local governments.”

In a five-ground preliminary objection, the AGF argued that: “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.”

Meanwhile, it has been confirmed that Osun State has applied to withdraw the suit. Olujimi confirmed the development but noted the withdrawal would only take effect once the court formally hears the application in September.

(PUNCH)