Supreme Court Slams FG Over Withheld Osun Council Funds

The Supreme Court has ruled that the Federal Government acted unlawfully by withholding Osun State’s local government funds, even though it also faulted the state for filing the case without proper approval from the councils involved.

The judgment followed months of tension over the unpaid allocations, which had sparked political and legal battles across the state.

The case began when Osun State approached the court to challenge the non-release of funds for its 30 local governments. The court, however, held that the Attorney General of Osun State lacked the authority to sue on behalf of the councils since there was no proof that the elected chairmen authorised the action.

Despite that ruling, the court maintained that the Federal Government breached the constitution by keeping the money. Justice Mohammed Idris, who delivered the lead judgment, said the government had no legal basis to block the allocations and should have paid them directly into the councils’ accounts.

The court also dismissed the Attorney General of the Federation’s contempt claim against Osun, noting that the federal authorities had failed to obey the constitution themselves. The minority judgment, delivered by Justice Emmanuel Agim, agreed that the funds were wrongfully withheld but held a different view on whether the state had the right to sue.

The dispute covers about ₦73.7 billion in allocations withheld between March and August 2025, based on federal data from the Accountant General’s office and the National Bureau of Statistics. Monthly figures ranged from ₦11.2 billion to ₦14 billion during the six-month period.

Before the case reached the Supreme Court, an Oyo State High Court had issued an interim order directing UBA not to release any of the councils’ funds, pending arguments on a separate motion. The order came after the state sought temporary protection over the allocations, claiming the situation could leave the councils helpless.

The controversy grew after Osun conducted local government elections in February, a process the APC-led Federal Government rejected. With the Supreme Court judgment now delivered, the state government has yet to announce its next steps or respond publicly to the ruling.