The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), has asked the Supreme Court to order the Osun State Government to refund seven months’ worth of local government allocations to the Federal Ministry of Finance, accusing the state of contempt and misappropriation.
Naijaonpoint reports that Fagbemi’s request forms part of a response filed by his counsel, Akin Olujimi (SAN), to a suit instituted by the Osun State Government over alleged non-payment of statutory LG allocations.
The suit, marked SC/CV/379/2025, was filed by the Osun State Attorney General against the AGF as the sole defendant. The state alleged that the Federal Government withheld the March 2025 allocation due to its 30 local government councils.
In its claim, the state said when it inquired about the delay, the Minister of Finance, Wale Odun, allegedly responded that he acted under AGF Fagbemi’s directive.
But in a counter-affidavit deposed to by Taye Oloyede, Special Assistant to the President on Legal Matters, the AGF denied ever issuing such an instruction. According to him, the Finance Minister also denied the claim during a meeting held on May 22, 2025, at which Oloyede was present.
“Neither the Honourable Attorney General of the Federation nor the Minister of Finance gave any directive to withhold Osun’s LG allocations,” the affidavit stated.
Oloyede explained that the direct payment of LG funds only requires the submission of duly verified account details to the Finance Ministry, a step that Osun State allegedly failed to take.
The counter-affidavit further claimed that Osun intended to use the LG funds to run state-level health and education programmes, contrary to a July 11, 2024, Supreme Court ruling that forbids states from disbursing LG funds.
“This is a direct violation of the Supreme Court judgment which mandates that LG funds be paid and managed solely by LG councils,” Oloyede argued.
The AGF also faulted Osun’s reliance on the 2004 Lagos v. FG precedent, describing it as irrelevant to the current case.
The AGF contended that Osun State has no legal standing to sue on behalf of the LG councils, especially when it could not prove consent from the councils or that their financial information had been submitted to the relevant federal agencies.
He noted that those currently administering Osun’s LGs were elected during the APC-led government and remain in office until October 2025.
Fagbemi also reminded the apex court that a Federal High Court ruling previously obtained by Osun was already overturned by the Court of Appeal, reinforcing that states must not control LG finances.
The AGF said Osun was defendant number 29 in the landmark July 2024 Supreme Court ruling, which ordered an end to the practice of state governments disbursing LG funds. He claimed Osun acknowledged the ruling but continued to flout it, receiving and spending allocations between July 2024 and February 2025.
“This suit is a calculated attempt to use the Supreme Court as a cover to legitimise an ongoing act of disobedience,” Fagbemi submitted.
He urged the apex court to enforce its judgment, hold Osun accountable, and order a refund of the funds unlawfully accessed.
He stated, “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 was gathered that the Osun State government has withdrawn the suit. However, Olujimi, who confirmed this, said the suit remains in court until the application for withdrawal is formally heard by the court in September.