Osun Drags Federal Government to Supreme Court Over Withheld Local Government Funds

The Osun State Government has ignited a fresh legal and political storm by taking the Federal Government to the Supreme Court over the alleged unconstitutional withholding of statutory allocations meant for its local government councils. Filed under suit number SC/CV/379/2025 on April 23, 2025, the case signals a critical legal confrontation with far-reaching implications for intergovernmental relations and the future of local governance in Nigeria.

Represented by Senior Advocate of Nigeria, Musibau Adetunbi, Osun State’s Attorney General is suing the Attorney General of the Federation (AGF) as the sole defendant. At the heart of the dispute is the non-release of federal allocations for the months of February, March, and April 2025, with uncertainty surrounding the disbursement for May. The state insists that its democratically elected local councils remain intact and operational, thereby fulfilling constitutional requirements for receiving such funds.

Osun’s government is seeking judicial declarations that the federal government has no constitutional authority to seize, suspend, or withhold local government funds—especially without lawful justification. The state bases its argument on Sections 162 and 7 of the 1999 Constitution (as amended), asserting that these provisions ensure financial autonomy and democratic independence of local councils. Precedents such as A.G. Lagos State v. A.G. Federation (2004) and A.G. Federation v. A.G. Abia State (2024) are cited to bolster the claim.

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State Warns of Institutional Breakdown

In an affidavit of urgency sworn by Osun’s Commissioner for Finance, Ogungbile Adeola Olusola, the government painted a grim picture of the consequences of continued financial blockade. The affidavit warned that the state’s education and health sectors are on the brink of collapse. “The continuous seizure of this fund by the federation would paralyse the education and health sectors of the plaintiff state if not urgently restrained by this honourable court,” the document reads.

Osun is also pursuing both interim and interlocutory injunctions to halt further withholding of funds pending the final resolution of the case. The state has strongly argued that the alleged financial embargo is not only illegal but discriminatory, particularly as other states—some with arguably less transparent democratic structures at the local level—continue to receive allocations.

Civil Society Backs Federal Action, Demands Broader Application

While Osun mounts its legal battle, the matter has sparked reactions nationwide. The Coalition for Democratic Governance in Africa (CDGA), a prominent civil society organisation, has entered the fray by endorsing the Federal Government’s actions against Osun but urging it to apply the same standards uniformly across all states.

In a statement signed by its convener, Dr. Paul Barka, the CDGA applauded what it termed a “principled stance” by the federal authorities. “We commend the decision of the Federal Government to withhold allocations to local governments in Osun State pending the restoration of democratic order at that level,” it stated. However, the group criticized the selective enforcement of constitutional principles, calling for similar scrutiny of governance practices in Zamfara and Benue States.

Concerns Mount Over Democracy in Zamfara and Benue

According to CDGA, both Zamfara and Benue are exhibiting signs of democratic erosion. In Zamfara, the recent suspension of 10 state lawmakers for criticizing the executive’s response to insecurity has drawn condemnation. Meanwhile, in Benue, the group alleges that the executive arm of government has effectively sidelined the legislature, governing unilaterally.

“This is not just about technicalities,” Dr. Barka warned. “What we are seeing is a dangerous precedent where governors sidestep democratic structures, rule by fiat, and still collect public funds meant to be spent under the scrutiny of elected legislators.”

The CDGA has called on the Central Bank of Nigeria and the Office of the Accountant General to halt allocations to states that are in breach of constitutional norms, especially those without functioning legislative oversight. “Rewarding executive impunity with federal funds undermines accountability and threatens the entire democratic framework,” the group asserted.

National Stakeholders Urged to Intervene

The coalition is now urging the National Assembly, the Nigerian Bar Association (NBA), and the Nigeria Governors’ Forum (NGF) to step in and restore sanity across the states. Dr. Barka emphasized that democracy must not be limited to elections, but must involve ongoing adherence to constitutional responsibilities, including proper legislative and executive checks.

“Nigeria cannot continue to preach democracy and practice autocracy in the states,” Barka stated, concluding with a rallying call to civil society, the media, and international observers. “These issues go beyond politics — they strike at the very heart of governance, accountability, and the rule of law.”

The battle lines are clearly drawn. While Osun State seeks legal redress for what it sees as a targeted federal action, civil society demands broader application of the same legal and democratic standards nationwide. As the Supreme Court prepares to hear what could become a landmark constitutional case, the outcome may well redefine the boundaries of federal and state power in Nigeria’s fragile democracy.