UPDATED: Supreme Court strikes out Osun’s withheld LG allocations suit, but faults FG’s funds seizure

The Supreme Court on Friday struck out a suit filed by the Osun State Government over the withheld allocations of its 30 local government areas.

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The court, in a 6-1 majority decision of its seven-member panel, ruled that the Osun State Attorney General and Commissioner for Justice lacked the legal right to institute the suit on behalf of the 30 local governments.

Osun State’s attorney-general had filed the suit on behalf of the state government against the Attorney-General of the Federation to challenge the federal government’s withholding of the statutory allocations due to its 30 local governments since March 2025.

The legal battle was an offshoot of the local government leadership crisis that stemmed from the dissolution of the elective local government structures which Governor Ademola Adeleke inherited in 2022 from the administration of his predecessor, Adegboyega Oyetola. All elected officials were of the All Progressives Congress (APC) while Mr Adeleke was elected on the platform of the Peoples Democratic Party (PDP).

The federal government, which called for the reinstatement of the sacked local government officials, had seized the local government allocations, saying it would only release the funds to elected officials.

The Governor Adeleke-led state government urged the Supreme Court to compel the federal government to release all seized funds and to stop what it described as “an unconstitutional and arbitrary seizure” of local government revenues.

Delivering the lead majority judgement, Mohammed Baba-Idris held that only duly elected and inaugurated local government officials held the authority to initiate or defend legal action directly.

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However, Mr Baba-Idris noted that the federal government was wrong in withholding the local government fund, an action that was a breach of the Nigerian constitution.

“Refusal to release the funds is a clear misuse of power by the defendant, and it is a clear disobedience to the court’s order that funds should be paid only to a democratically elected government,” the justice declared.

He therefore counselled that the funds be directly released to the local governments’ accounts.

The court also dismissed AGF’s contempt allegations against the Osun State government, adding that the AGF, Lateef Fagbemi, was more guilty of contempt of court than the state government by withholding the local government funds in contravention of the law.

Mr Baba-Idris, however, stated that since there was no evidence that the Osun State Attorney General had been briefed by the local governments, he ought not to have filed the case on their behalf.

He therefore upheld the preliminary objection of the federal government challenging the jurisdiction of the Supreme Court to hear the matter.

Five other justices on the panel agreed with Mr Baba-Idris’ lead judgement. They were the head of the panel, Uwani Abba-Aji, Ibrahim Saulawa, Chidiebere Uwa, Moore Adumein and Jamilu Tukur.

Emmanuel Agim, the lone voice who upheld the Osun State government’s case, dissented from the majority judgement.

In his dissenting opinion, Mr Agim ruled that the Osun State attorney-general had the right to institute the case, while also echoing the illegality of the seizure of the state’s local government funds.

According to Mr Agim, the action of the federal government in withholding the local governments’ funds was wrong “because it was capable of crippling the activities of the councils.”

Mr Agim was the one who gave the lead judgement of the Supreme Court affirming the financial autonomy of the 774 local government areas of the state in July last year.

He ruled in the judgement that local governments across the country should, from Thursday, receive their allocations directly from the Accountant-General of the Federation.

Mr Agim also ruled in the judgement that local government funds should only be released to elected officials.

Background

The state, since Mr Adeleke took office in 2022, has been engulfed in local government crisis, which has sparked violence and prompted a series of court cases including the one decided on by the Supreme Court on Friday

In October 2022, the administration of the immediate-past governor, Mr Oyetola, held a local council elections after Mr Oyetola lost his re-election bid and just before the end of his tenure in office.

The PDP, the major opposition party in the state at the time, boycotted the election and challenged the legality of the exercise in court.

Mr Oyetola’s party, the APC, won all the chairmanship and councillorship elections across the state.

But the PDP won its court case. The court sacked the elected officials.

Three days after his inauguration, Governor Adeleke, who had defeated Mr Oyetola in the 2022 governorship election, dissolved the APC chairpersons and councillors citing court judgement, and replaced them with caretaker committees.

APC rejected the move and appealed against the court decision sacking the elected officials. In February 2023, the Court of Appeal struck out the PDP’s suit for lack of jurisdiction, prompting the sacked officials belonging to the APC to attempt to retake council secretariats, leading to bloody clashes.

The local crisis continued in the state, with Governor Adeleke administration also organising another local government elections in the state, which the AGF, Mr Fagbemi, declared illegal. The state went on with the elections, all the same which PDP won across the state.

This prompted the AGF to direct that the local government funds be withheld pending the resolution of the crisis.

Arguments

At the hearing of the suit at the Supreme Court on 7 October, the state governor argued that the Court of Appeal’s ruling that cancelled the October 2022 elections and affirmed the February 2025 elections as legitimate had settled the crisis.

Musbau Adetunbi, a Senior Advocate of Nigeria (SAN), who represented the Osun State Government, said the AGF had ignored subsisting judgements of the Federal High Court, Osogbo, delivered on 30 November 2022, and the Court of Appeal, 13 June 2025, which he claimed affirmed the legitimacy of council chairmen and councillors elected in February.

He told the Supreme Court that all withheld allocations be released directly into the accounts of the local governments headed by duly elected officials and sought a perpetual injunction restraining future seizures.

He argued that the AGF was wrong in his letter recognising APC local government chairmen when the matter was pending before the court of records.

However, the AGF’s lawyer, Akin Olujimi, also a SAN, urged the Supreme Court to dismiss the case. He argued that the Osun State Government did not have the legal authority to bring the issue before the court.

READ ALSO: Osun 2026: What’s next for Governor Adeleke after his exit from PDP?

Reaction from Osun State’s lawyer

Reacting to the judgment of the Supreme Court on Friday, Mr Adetunbi, the Osun State lawyer, said with the decision, there is no victor in the case.

“The matter has been struck out. It does not give anybody victory. The Lordships refused to exercise jurisdiction, except for the dissenting opinion. So,the implication is that it’s neither here nor there. When you refuse to exercise jurisdiction, you’ve not made any pronouncement.

“But certainly, when you strike out a matter on a general basis, it does not give anybody jurisdiction.”