Nigerian Government Withholds Osun LG Allocations For 16 Months As Funds Hit ₦216billion | Sahara Reporters

The election was challenged by the All Progressives Congress (APC), triggering a prolonged legal and political dispute over the control and administration of the councils.

At least 30 local governments for over 16 months in Osun State have been denied statutory allocations that would ordinarily support grassroots development, following a prolonged dispute over the conduct of local government elections in the state.

The President Bola Tinubu-led Nigerian government began withholding the allocations in March 2025, shortly after local government elections were held in Osun in February 2025.

The election was challenged by the All Progressives Congress (APC), triggering a prolonged legal and political dispute over the control and administration of the councils.

An analysis of official revenue allocation documents produced by the Federal Accounts Allocation Committee (FAAC) shows that about ₦216billion meant for Osun’s 30 local governments was not released between March 2025 and June 2026.

The amount comprises ₦131.5billion withheld between March and December 2025 and another ₦85.3billion that was not released between January and June 2026.

The allocations withheld between July and September 2026 had not been ascertained as of the time of filing this report.

FAAC records show that Osun’s 30 local governments were due to receive ₦11.9billion in March 2025, ₦11.2billion in April, ₦11.7billion in May and ₦12.1billion in June.

The allocation increased to ₦12.8 billion in July, ₦14 billion in August, ₦14.4 billion in September, ₦15.8 billion in October, ₦14.6 billion in November and ₦13.09 billion in December.

The total allocation for the 10-month period was ₦131.5 billion.

The withholding continued into 2026, with the councils due ₦14.06 billion in January, ₦14.5 billion in February, ₦12.8 billion in March, ₦13.7 billion in April, ₦15.4 billion in May and ₦14.9 billion in June.

The six-month allocation amounted to another ₦85.3 billion, bringing the total amount withheld between March 2025 and June 2026 to approximately ₦216 billion.

The prolonged withholding has remained at the centre of legal and political disagreements between the Federal Government and the Osun State Government.

The legality of the decision was eventually considered by the Supreme Court, which held that withholding the allocations was unconstitutional.

In the lead judgment delivered by Justice Mohammed Idris, the apex court described the seizure of the allocations as a “grave breach of the 1999 Constitution.”

Justice Idris further held that “the hand of the federal government was soiled” by the decision to withhold the funds and directed that the allocations should be “directly channeled to local accounts.”

The court also rejected contempt allegations filed against the Osun State Government by the Attorney-General of the Federation, holding that he was “in more contempt than Osun by not paying the fund as required by law.”

However, the Supreme Court faulted the Osun State Government for instituting the case without demonstrating that it had obtained the consent of the affected local governments.

According to Justice Idris, “there was no evidence that Osun Attorney General was briefed by the local governments.”

In a dissenting opinion, Justice Emmanuel Agim maintained that the Osun Attorney-General had the authority to institute the action. He described the Federal Government’s conduct as “in bad taste because it was capable of crippling the activities of the Councils.”

In September 2025, the High Court of Justice of Oyo State granted an interim injunction restraining United Bank for Africa (UBA) Plc from releasing statutory allocations belonging to Osun’s 30 local governments pending the determination of the substantive suit.

The case has since added another legal dimension to the dispute over the councils’ funds.

In March, residents of Osun protested at some UBA branches in Osogbo and Ilesa, accusing the bank of complicity in the handling of the local government allocations.

Osun State Governor, Ademola Adeleke, has repeatedly said the funds are essential for the payment of salaries and delivery of basic services. He said the allocations were needed to support primary school teachers, nurses and health workers in the state’s 332 primary healthcare centres, council workers, traditional councils and retirees.

The Osun State government has also accused the APC of influencing the withholding of the funds.

When SaharaReporters contacted the Osun State APC Chairman, Tajudeen Lawal, for his comments and to ascertain the party’s position on the controversy, he did not respond to messages or pick his phone as of the time of filing this report.

The withholding of Osun’s local government allocations has also become one of the longest such disputes in Nigeria’s history since 1999.

The longest occurred during the tenure of President Tinubu as governor of Lagos State.

Local government allocations are intended to support services and development at the grassroots, including primary healthcare, schools, markets, rural water supply and roads.

A senior researcher with Good Governance Africa, Adejumo Kabir, warned that prolonged withholding of the funds could undermine grassroots governance.

“Local governments are constitutionally recognised as a tier of government with responsibilities closest to the people. But when their statutory resources are withheld for such an extended period, local residents bear the cost of this menace.”

He said the situation could affect the delivery of essential services and weaken local government autonomy.

“The dangers include the erosion of grassroots governance and the longer the situation persists, the greater the risk that services ordinarily delivered at the local level will suffer. If local governments become financially dependent on either the state or federal authorities, the constitutional idea of local-government autonomy becomes largely theoretical.”

The prolonged dispute has therefore left billions of naira in statutory allocations at the centre of a wider contest over local government administration, while raising concerns about the impact of prolonged funding constraints on workers, retirees and residents who depend on services provided at the grassroots.