The Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, has urged the Supreme Court to compel the Osun State Government to refund seven months’ worth of local government allocations to the Minister of Finance.
The request was contained in a response filed by Fagbemi’s counsel, Chief Akin Olujimi (SAN), to a lawsuit initiated by the Osun State Government.
In the suit (SC/CV/379/2025), Osun State accused the Federal Government of failing to release statutory allocations due to its 30 local government councils for March 2025. The state claimed that when it inquired about the unpaid funds, the Minister of Finance, Wale Odun, allegedly said he was acting on the AGF’s directive.
However, Fagbemi denied the allegation, stating that neither he nor the Finance Minister ordered the withholding of the funds. In a counter-affidavit, Taye Oloyede, Special Assistant to the President, testified that Odun explicitly denied receiving any such instructions during a meeting on May 22, 2025.
Fagbemi also accused Osun State of disobeying a Supreme Court judgment from July 11, 2024, which ruled that local government allocations must be paid directly to councils—not through state governments. He argued that Osun continued receiving and spending the funds from July 2024 to February 2025, in violation of the court’s order.
“The only way to vindicate the authority of this court,” Fagbemi said, “is to order the plaintiff to pay back all local government funds collected between July 2024 and February 2025.” He asked that the money be remitted to the Minister of Finance for onward transfer to the respective councils.
Oloyede further stated that Osun’s local governments had not submitted their account details to the Finance Ministry, which is required for direct payments. He also noted that the current council officials were elected under the previous administration and would remain in office until October 2025.
Fagbemi contended that Osun lacked the legal right to sue on behalf of its local governments. “If any local government has been wrongly deprived of its funds,” he said, “it is the council itself—not the state government—that has the right to sue.”
Meanwhile, reports indicate that Osun State has withdrawn the lawsuit. However, Olujimi confirmed that the case remains pending until the court formally hears the withdrawal application in September.
