The Supreme Court has criticised the Federal Government for failing to fully implement its July 2024 judgment directing that local governments’ allocations from the Federation Account be paid directly to them.
In a lead judgment delivered by Justice Mohammed Idris in a suit filed by the Osun State Attorney General over alleged withheld LG funds, the court said there was no credible evidence that the Attorney General of the Federation had taken concrete steps to operationalise the earlier ruling in AG Federation v AG Abia and others, and ordered that the decision be implemented forthwith.
While striking out the Osun suit in a 6–1 majority decision, the court held that the Osun AG lacked locus standi to sue on behalf of local governments because councils are constitutionally recognised, autonomous entities with their own legal capacity to sue and be sued, or to authorise the state AG to act for them.
Justice Idris stressed that LGs are not appendages of state governments and that the funds standing to their credit in the Federation Account belong exclusively to the councils, not jointly with states, adding that only democratically elected LG officials have legitimate authority to control such money.
He rejected the AGF’s attempt to accuse Osun of contempt of the Abia judgment, ruling instead that it is the Federal Government that has “failed to give effect” to the decision, and warning that Abuja cannot “drink from the fountain of justice” with “soiled hands” while it neglects its own constitutional duties.
The court reaffirmed that the FG must remit in full, without delay or excuses, all outstanding and future allocations directly to all democratically elected LG councils, cautioned that non compliance amounts to a deliberate disregard for the rule of law, and urged immediate, practical steps to enforce the 2024 ruling nationwide.
In a lone dissent, Justice Emmanuel Agim held that the Osun AG did have standing and that the dispute was properly between the state and the Federation over withheld LG funds, but his view did not carry the majority.
Following the judgment, the Osun chapter of ALGON hailed the ruling as a “victory for democracy” and said it ends prolonged battles over council control, while vowing to drive grassroots development now that constitutional principles on LG autonomy are being enforced.
On the same day, the Osun House of Assembly fast tracked and passed the Osun State Local Government Account Administration Bill 2025, which mandates that all LG accounts be operated only by senior civil servants as signatories, bars political office holders from signatory roles and prescribes up to five years’ imprisonment or a N50 million fine for banks or persons who violate the law.
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