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.
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 that 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 rejected 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.
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Meanwhile, it was gathered that the Osun State government has withdrawn the suit.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.