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The Supreme Court has struck out a suit filed by the Osun State Government challenging the alleged withholding of local government funds by the Federal Government, ruling that the Attorney-General of Osun lacked the legal standing to institute the action. But in a significant and emphatic turn, the apex court urged the Federal Government to immediately and fully implement all earlier judgments granting financial autonomy to Nigeria’s 774 local government areas.

In its decision, the seven-member panel reaffirmed that the Supreme Court’s original jurisdiction applies strictly to disputes between the Federal Government and a state, not between the Federal Government and local councils. Since local governments are constitutionally recognised as autonomous entities capable of suing and being sued, the court held that only the councils themselves — not the state — could bring such a case.

Justice Idris, delivering the lead judgment, dismissed the Osun Attorney-General’s attempt to frame the case as public interest litigation, insisting that “procedural thresholds cannot be bypassed” merely by invoking public interest.

Despite sustaining the preliminary objection raised by the Attorney-General of the Federation and striking out the case as incompetent, the court issued a firm reminder to the Federal Government: respect and enforce the law.

The Supreme Court urged the FG to fully implement all previous judgments granting financial autonomy to every one of Nigeria’s 774 LGAs, warning that non-compliance amounts to outright disobedience of the rule of law.

Key Findings (Ratios) of the Judgment

1. LG statutory allocations must be paid directly to LGAs.
2. Nigeria’s three tiers of government — Federal, State, and Local — are constitutionally autonomous and independent of one another.
3. Local governments have exclusive control over their funds, free from State Government interference. Only LGAs — not states — can challenge alleged non-release or diversion of their funds.
4. The Osun Attorney-General lacked locus standi, as there was no dispute between Osun State and the Federal Government. The suit was therefore incompetent and struck out.
5. Osun’s LGAs, as autonomous entities, should have filed the case themselves in a competent High Court. The AG of Osun was described as a “meddlesome interloper” for attempting to invoke the Supreme Court’s original jurisdiction.
6. The Federal Government is directed to remit all local government funds nationwide directly to the LGAs, and failure to do so would constitute disobedience of the law. Six of the seven Justices concurred; one dissented.

Background of the Suit

Osun State, in suit SC/CV/775/2025, had sought ten reliefs, including declarations that the Attorney-General of the Federation must comply with earlier rulings that validated democratically elected council officials following the February 22, 2025 local government elections. The state also sought orders compelling the Federal Government to release allegedly withheld allocations and restraining the FG from diverting LGA funds.

Osun’s counsel, Musibau Adetunbi, SAN, argued that the Attorney-General of the Federation had directed funds to sacked APC council chairmen and councillors despite pending litigation — a move halted only by an interim order.

But the Federal Government’s counsel, Chief Akin Olujimi, SAN, countered that Osun had no legitimate claim, accusing the state of frustrating the former officials whose tenure ended in October, and insisting that the case was wrongly brought before the Supreme Court.

Ultimately, while the court agreed with the Federal Government that Osun’s suit was incompetent, it placed a heavier burden on the FG:

obey the Constitution, respect the autonomy of local governments, and release all statutory allocations directly to the councils — without interference from any state government.