SUPREME Court Dismisses Osun’s Lawsuit Over Unpaid Local Government Funds

The Supreme Court on Friday, December 5, 2025 struck out a suit filed by Osun State Government that sought to compel the Federal Government to release withheld allocations belonging to local government areas in the state.

A seven-member panel of the apex court, in a split decision of six to one, held that the legal action brought by the Attorney General of Osun State lacked competence.

According to Vanguard on Friday, December 5, 2025 in the lead judgment delivered by Justice Mohammed Idris, the court held that the LGCs of Osun state lacked the locus standi to activate the Supreme Court’s original jurisdiction on behalf of the 30 councils.

Justice Idris stressed that the Supreme Court could only be approached as a court of first instance to settle disputes between a state and the Federal Government and that the LGCs, being legally recognised autonomous entities, were the proper parties to challenge the FG’s action.

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He dismissed the state AG’s argument that the suit was a public interest litigation

Although the Supreme Court upheld a preliminary objection filed by the Attorney General of the Federation challenging the competence of the suit, it admonished the FG to give full effect to its judgment granting fiscal autonomy to all 774 Local Government Areas in the country.

Osun State had sought multiple reliefs, including a declaration that the AGF could not act contrary to the subsisting decisions of the Federal High Court and the Court of Appeal by withholding allocations and directing payments to sacked APC local government officials

Counsel for Osun State, Musibau Adetunbi, SAN, argued that the AGF attempted to “destroy the res (subject matter) by attempting to pay the money to one of the contending parties,” noting that an earlier court order stopped the release of the funds. On its part, the FG contended that “no cause of action was established against it” and that the state was seeking to frustrate the APC officials whose three-year term had expired, adding that “the plaintiff not only lacked the locus standi but was also involved in an abuse of the judicial process.”