The Federal Government of Nigeria, led by President Bola Tinubu, stopped releasing funds to Osun State's 30 local government areas in March 2025, following a face-off over council elections. The elections, held in February 2025, were contested by the All Progressives Congress, sparking a prolonged legal and political battle over the legitimacy and control of the councils. This development has had a significant impact on the state's grassroots development.
According to official revenue sharing data from the Federation Account Allocation Committee, about N216 billion earmarked for Osun's 30 LGAs was withheld between March 2025 and June 2026. The figure includes N131.5 billion not released between March and December 2025, and another N85.3 billion withheld between January and June 2026. The monthly entitlements ranged from N11.9 billion to N15.8 billion.
The crisis has fueled legal and political tension between the Federal and Osun State Governments, with the matter eventually reaching the Supreme Court. In its lead judgment, the apex court ruled that the action was unconstitutional, describing it as a "grave breach of the 1999 Constitution." The court ordered that the funds be "directly channeled to local accounts." The judgment was delivered by Justice Mohammed Idris.
The Supreme Court also dismissed contempt claims brought against the Osun State Government by the Attorney-General of the Federation. However, the court faulted the Osun State Government for filing the suit without showing proof that it got the consent of the affected local governments. Justice Idris held that "there was no evidence that Osun Attorney General was briefed by the local governments."
The crisis has triggered other litigations, including an interim injunction by the High Court of Justice of Oyo State in September 2025. The injunction stopped United Bank for Africa, UBA Plc, from releasing statutory allocations belonging to Osun's 30 LGAs pending determination of the substantive suit. Residents had staged protests at some UBA branches in Osogbo and Ilesa, accusing the bank of complicity in handling the council funds.
Governor Ademola Adeleke has repeatedly lamented that the withheld funds are crucial for salary payments and basic service delivery. The funds are needed for primary school teachers, nurses and health workers in 332 primary healthcare centres, council staff, traditional councils, and pensioners. The Osun State Government has accused the APC of being behind the continued seizure of the allocations.
The situation has had a significant impact on the state's grassroots development, with many essential services and projects put on hold. The state government is yet to determine the allocations for July to September 2026. The prolonged delay in releasing the funds has exacerbated the challenges faced by the local government areas.
Key points
- The Federal Government withheld N216 billion in allocations to Osun State's 30 local government areas for 16 months.
- The Supreme Court ruled that the action was unconstitutional and ordered that the funds be released to the local government areas.
- The crisis has had a significant impact on the state's grassroots development, with many essential services and projects put on hold.
