The Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi (SAN), on Friday urged the Supreme Court to compel the Osun State Government to refund seven months’ worth of statutory allocations meant for local government councils.

The request forms part of the AGF’s formal response to a legal action instituted by the Osun State Government over withheld federal allocations.

Osun had filed suit SC/CV/379/2025 against the AGF, accusing the Federal Government of failing to release its March 2025 local government allocation. The state alleged that the Minister of Finance, Wale Odun, had withheld the funds on the directive of the AGF.

However, in a counter-affidavit filed by Fagbemi’s counsel, Chief Akin Olujimi (SAN), the AGF firmly denied issuing such a directive and challenged both the legitimacy of the claim and the state government’s locus standi.

In the affidavit, deposed by Taye Oloyede, Special Assistant to the President, the AGF maintained that neither he nor the Finance Minister instructed the withholding of Osun’s local government funds. Oloyede added that during a meeting on May 22, 2025, Odun categorically denied receiving any directive to that effect.

Furthermore, the AGF contended that Osun failed to present evidence showing that the allocations were deliberately withheld or that the state had submitted the necessary bank account details for its local government councils to receive the funds directly. According to Oloyede, the councils in question were elected during the previous APC-led administration and remain in office until October 2025.

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Fagbemi argued that the state government acted in contempt of the Supreme Court’s July 11, 2024, judgment in AGF v. Attorney General of Abia State & Others, which prohibited state governments from handling local government funds. The ruling required that such allocations be paid directly to local councils. Despite being listed as Defendant 29 in that case and acknowledging the court’s directive, Osun allegedly continued to collect and spend local government funds between July 2024 and February 2025.

The AGF accused the Osun State Government of seeking judicial cover to continue violating the Supreme Court’s ruling. He described the lawsuit as “a calculated act of egregious contempt” and called on the apex court to assert its authority by ordering Osun to repay the local government allocations received over the seven-month period. He requested that the refunded funds be remitted to the Minister of Finance for proper disbursement to the respective councils.

In a five-point preliminary objection, Fagbemi argued that Osun lacked the legal standing to initiate the suit, as only local governments, not state governments, have the constitutional right to seek redress for unpaid allocations. He further maintained that the case did not raise a genuine dispute that would warrant the Supreme Court’s original jurisdiction under Section 232(1) of the 1999 Constitution (as amended).

“The plaintiff has no legal capacity to act as a watchdog over the financial entitlements of constitutionally recognised local government authorities,” the AGF submitted. “If any local government council believes its funds have been withheld, it is that council, not the state government, that is entitled to seek legal remedy.”

The AGF also noted that a prior Federal High Court judgment in favour of the Osun State Government had already been overturned on appeal, further weakening the state’s position.

Meanwhile, it has emerged that the Osun State Government has opted to withdraw the suit. Chief Olujimi (SAN), counsel to the AGF, confirmed the development but noted that the case remains technically active until the Supreme Court formally hears and approves the withdrawal application, which is expected in September.

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