CBN, OAGF Halt Release of Osun Local Government Funds

On Monday, the Central Bank of Nigeria (CBN) and the Office of the Accountant General of the Federation (OAGF) appeared before the Federal High Court in Abuja, where they firmly denied any claims regarding the release of the withheld financial allocations intended for local governments in Osun State.

These allocations were specifically meant for the chairmen and councillors who were elected under the banner of the All Progressives Congress (APC) in the year 2022.

The situation has garnered significant attention, as it involves not only financial matters but also the political dynamics within the state.

During the proceedings, representatives from the two federal agencies maintained that the assertions regarding the release of funds to the disputed local government officials were nothing more than unfounded rumors.

They emphasized that the claims made by the Osun State Government were not substantiated by any credible evidence. This denial from CBN and OAGF came in response to statements made by Musibau Adetunbi, SAN, the legal counsel representing the Osun State Government. Adetunbi informed Justice Emeka Nwite that, contrary to the court’s expectations, the funds in question had been unlawfully disbursed to the APC chairmen between Thursday and Friday of the previous week.

Adetunbi pointed out that despite a clear court order mandating that the status quo be maintained while the litigation regarding the financial allocations was ongoing, the CBN and OAGF proceeded to release the withheld funds. This release was allegedly facilitated through special accounts that had been opened for the local government chairmen at the United Bank for Africa (UBA). The implications of this action are significant, as it raises questions about the adherence to legal protocols and the integrity of the financial management processes within the government.

In a prompt response to this situation, the Osun State Government took decisive action by approaching the High Court of Oyo State. They successfully secured a restraining order against UBA, which effectively prohibited the bank from disbursing the funds to the individuals affected by the court’s ruling. Adetunbi explained that the decision to seek a restraining order from the Oyo State High Court was necessitated by the ongoing strike of the judiciary in Osun State, which rendered them unable to pursue the matter in their home jurisdiction.

While Adetunbi acknowledged that the restraining order had been duly served to both the bank and the federal agencies involved, he admitted that he did not possess any documentary evidence at the time of his submissions to present before the court. This lack of documentation could potentially impact the strength of his arguments and the overall case.

In their defense, Murtala Abdulrasheed and Tajudeen Oladoja, both Senior Advocates of Nigeria (SAN) representing the CBN and OAGF respectively, categorically denied the allegations made by the plaintiff. They asserted that their clients had not released any funds to the APC local government chairmen as claimed. Both lawyers aligned in their arguments, contending that the assertions made by Adetunbi were merely speculative and lacked the necessary documentary support to be taken seriously in a court of law.

In a motion seeking to transfer the hearing of the case back to Osogbo, Adetunbi argued that since the court’s vacation period had lapsed, it was only just and fair for the suit to be heard in the location where it was originally filed. He emphasized that transferring the case from Osogbo to Abuja during the vacation period was not only in bad faith but also raised serious questions about the motivations behind such a decision. Adetunbi pointed out that the letter from the Chief Judge of the Federal High Court, which facilitated the transfer, provided reasons that he deemed untenable. He argued that the justification that all defendants were based in Abuja should not have originated from the Chief Judge but rather from the defendants themselves.

In a strong counter-argument, the representatives of CBN and OAGF contended that the letter transferring the case from Osogbo to Abuja clearly indicated that the Abuja court was the appropriate venue for hearing the suit substantively. They maintained that the transfer of cases by the Chief Judge, John Tsoho, was an administrative matter that could not be contested by the Osun State Government. This assertion highlights the complexities involved in legal jurisdiction and the administrative powers held by judicial authorities.

The two federal agencies urged the court to expedite the determination of the case in Abuja, emphasizing the need for a swift resolution to the ongoing dispute. They argued that the legal processes should not be unnecessarily delayed, as this could have broader implications for governance and the management of public funds.

As the proceedings unfolded, Justice Nwite took note of the arguments presented by both sides. He recognized the importance of the issues at hand and the potential impact on local governance in Osun State. After considering the submissions, Justice Nwite scheduled a ruling for October 16, 2025, to determine whether the suit should be returned to Osogbo for further proceedings. This ruling will be pivotal in shaping the future of the financial allocations in question and could set a precedent for similar cases involving local government funding and political disputes in Nigeria.

The ongoing legal battle underscores the intricate relationship between financial management, political dynamics, and the rule of law in Nigeria. As the case progresses, it will be essential to monitor the developments closely, as they may have far-reaching consequences for the governance of Osun State and the broader political landscape in the country. The outcome of this case could influence not only the immediate financial allocations but also the trust and confidence of the public in the institutions responsible for managing public funds and ensuring accountability in governance.