The Supreme Court yesterday expressed displeasure at Federal Government’s failure to put into effect the July 2024 judgement of the court that local governments’ share from the federation account be paid directly to them.
The apex court said there was no credible evidence before it that the Attorney General of the Federation (AGF) had initiated or completed the needed modalities to give effect to its judgment in the case of AG of the Federation and AG of Abia State and others.
It asked the authorities to commence the implementation of that decision forthwith.
“In the instant suit, the decision of this court in the case of AG of the Federation and AG of Abia State and others is binding on the defendant, who is to ensure that it is complied with,” Justice Mohammed Idris said in his lead judgement yesterday in a suit filed on behalf of the Osun State Government by the state’s Attorney General to compel the Attorney General of the Federation (AGF) to release withheld allocations due to local governments in the state.
The court struck out the Osun State government suit.
The apex court, in a split decision of six-to-one, held that the AG of Osun State lacked the locus standi (the legal right) to have filed the suit on behalf of LGs in Osun State as they are legal entity with capacity to sue to assert their right.
In the lead majority judgment in the suit marked: SC/CV/773/2025, prepared and read by Justice Idris, the Supreme Court partially upheld the preliminary objection raised by the AGF against the competence of the suit.
Justice Idris held that the plaintiff failed to establish that there was any cause of action capable of invoking the original jurisdiction of the Supreme Court as provided under Section 232(1) of Construction.
He noted that from the facts of the case, the issue in dispute was about the alleged failure of the Federal Government to release funds standing to the credit of Osun State Local Governments in the Federation account.
He held that the plaintiff failed to establish that the subject of the suit constituted a dispute between Osun State and the FG to have clothed the state’s AG with the necessary locus standi to approach the Supreme Court.
He distinguished the Osun case from that of the Attorney General of the Federation v the Attorney General of Abia and others, in which the Supreme Court ordered the direct payment of allocations to local governments across the federation.
Justice Idris held that such a suit, relating to dispute over local government funds, ought to have been filed by the affected local governments, which are a constitutionally recognised tier of government and separate juristic entities vested with the power to sue and be sued, or filed by the state’s AG with the authorisation of the affected LGAs.
He held that the LGs are not appendages of the states and are therefore autonomous and with the legal capacity to take care of their own affairs.
“Just as the Federal Government cannot interfere in the affairs of the states, being the second tier of government, the state government equally lacks the constitutional authorities to interfere in
the affairs of the Local Government councils, which are autonomous bodies created by the Constitution,” he said.
He added that even in instances where LGs are combining efforts with the state as provided in the Constitution, they do so as autonomous entities.
This position , he said, implies that the Local Government councils “possess inherent authorities to conduct their affairs without interference from any tier of government, including the collection and management of revenues accruing to them.
His words: “This, no doubt, implies that the ownership of funds allocated to the Local Government councils from the Federation Account reside exclusive with the councils.
“The Constitution does not envisage any form of joint ownership between the states and the Local Government councils.
“It is the democratically elected Local Government council officials, and not the state government, that possess the legitimate authorities to control such funds.”
The judge faulted the AGF’s argument that Osun State was in contempt of the Supreme Court ‘s judgment in the AG of the Federation v. AG, Abia and others, insisting that it was the AGF, and by extension the FG, that has failed to give effect to the judgment.
He held that the duty to initiate and operationalise the mechanisms required for direct funding of the nation’s Local Governments lies with the federal and state governments.
The judge noted that the process of opening dedicated accounts for the 774 LGAs requires several administrative steps within the purview of federal agencies
Justice Idris held the defendant failed to take necessary steps to ensure that the judgment of the court on Local Government autonomy was obeyed.
He said since the defendant failed to comply with the subsisting judgment of the court, it lacked the moral right to accuse the plaintiff of collecting and receiving funds meant for LGs in Osun State.
The judge said: “I must also emphasize that the defendant’s hands are not clean, but soiled and cannot be allowed to drink from the fountain of justice since he who comes to equity must come with clean hands, and he who seeks equity must do equity.”
Justice Idris held that by the July 2024 judgment, the Federal Government is under obligation to ensure that all funds standing to the credit of Local Governments in the federation account are sent directly to them without being withheld under any excuse.
In addition, he said the Federal Government should take immediate steps to enforce the judgment and release all outstanding allocations to all LGs in the country.
Justice Idris said: “it is pertinent to issue a stern admonition to the Federation. This court’s judgment in AG of the Federation v. AG Abia and others remains the subsisting and binding order of this court.
“As the Executive arm of government, the Federation is under a constitutional and legal duty to give full and faithful effect to the directives of this court.
“It is imperative that the Federation ensures strict and immediate compliance with the terms of that judgment without evasion, delay and partial performance.
“In particular, the Federation is hereby reminded that it is bound to remit in full, and without any further delay, all outstanding allocations due to all democratically elected Local Government councils across Nigeria.
“Any failure to comply with the orders of this court constitutes a deliberate disregard of the rule of law.
“The Federation is enjoined to take immediate and practical steps to discharge its constitutional responsibilities in accordance with this court’s directives in the judgment in AG Federation v. AG Abia State and others, thereby re-enforcing democratic governance, ensuring accountability and upholding the supremacy and sanctity of the Constitution,” he said.
Justice Emmanuel Agim wrote the dissenting judgment in which he disagreed with the position of the six other Justices on the seven-member panel.
Justice Agim rejected the defendant’s preliminary objection and assumed jurisdiction over the case.
He held that the AG of Osun State has the locus standi to approach the Supreme Court on the issue.
Justice Agim further held that the plaintiff established a cause of action and that the dispute was between the Osun State Government and the Federation over the latter’s decision to withhold state’s Local Government councils’ allocations.
In the July 2024 judgement, the Supreme Court directed the federal government to pay allocations directly to local government councils from the federation account.
A seven-member panel of justices said state governments had continued to abuse their powers by retaining and using the funds meant for LGs.
It also ordered the federal government to withhold allocations of LGs governed by unelected officials appointed by the governor.
Justice Agim, who read the lead judgment, said states are mandated to ensure that their local government councils are democratically elected, and that governors cannot use their powers to dissolve democratically elected local government councils.
“The amount standing to the credit of local government councils must be paid by the federation to the local government councils and not by any other person or body,” the judge said.
“The said amount must be paid to local government councils that are democratically elected.
“An order of injunction is hereby granted restraining the defendants from collecting funds belonging to the local government councils when no democratically elected local government councils are in place.
“An order that henceforth no state government should be paid monies standing to the credit of the local government councils.
“An order for immediate enforcement and compliance with these orders by the state governments and successive governments henceforth.”
The federal government filed the suit at the Supreme Court against governors of the 36 states to ask for full autonomy for the country’s 774 local governments.
The federal government prayed the court to authorise the direct transfer of funds from the federation account to local governments — in accordance with the constitution.
Osun ALGON hails ‘victory for democracy’
The Osun State Chapter of the Association of Local Governments of Nigeria (ALGON) welcomed yesterday’s verdict of the Supreme Court as “a victory for democracy, victory for good governance and victory for common man on the streets of Osun.”
Chairman of the association, Mr Abiodun Idowu, said in a statement in Osogbo that the judgement was a testament to “the fact that judiciary remains the last hope of a common man.”
“This sound judgement,” he added , “has practically put an end to the protracted litigations over the control of our Councils in Osun.”
Continuing, he said: “To us, this legal feat has further entrenched our commitment to continue to bring all round development and massive socioeconomic and infrastructural developments to the people at our various councils.
“We are resolute to resuscitate the dearth and inflictions that Osun government under the watch of Governor Ademola Adeleke has plunged our Councils into as we begin to bring the more desired change and development to the grassroots.”
Osun Assembly passes bill to regulate administration of LG accounts
As the Supreme Court was handing down its judgement in Abuja,the Osun State House of Assembly passed a bill regulating the administration of the state local government accounts with commercial banks and financial institutions.
The bill entitled “Osun State Local Government Account Administration Bill 2025” was introduced by Speaker Adewale Egbedun during plenary and passed in quick succession till its third reading.
The Majority Leader, Mr Adewunmi Babajide, said under Order 80 Rule 1 of the Assembly, that “every bill shall receive three readings before passage but two-third of the lawmakers can fast track a bill’s passage.”
Babajide, while reading the policy trust of the bill, said in accordance to Section 7(1) of the 1999 Constitution, local governments’ existence and operation are provided for but the statutory allocation and internal revenue of the local governments must be guided.
The speaker, while presenting the bill stated that all local government accounts shall now be opened and operated in accordance with the bill.
“These include two signatories to each local government accounts who must be the Director of Finance, and the Director of Administration and General Services.
“That the Permanent Secretary of the Osun Civil Service Commission must issue a signed letter of introduction to any commercial bank or financial institutions, introducing the signatories,” he stated.
He said no political office holder or appointee shall be or allowed to be a signatory to any local government account opened or to be opened by any local government in the state.
“Any person, body, commercial bank, agency, organisation, group or entity who opens, operates, maintains and allows the opening, operation or maintenance of local government account, contrary to the provision of the bill, shall be guilty of an offence and liable on conviction to five years imprisonment or a fine of N50 million or to both,” he said.
He said that any further amendment on the passed bill would be done administratively.
The Speaker said that a clean copy of the passed bill would be transmitted to the Gov. Ademola Adeleke for assent.
