FAAC records indicate statutory allocations remained unpaid despite prolonged litigation, while opposing parties continue to dispute responsibility and legality
By Adele Olagunji
OSOGBO, Nigeria – July 6, 2026
Fresh scrutiny has been placed on Nigeria’s intergovernmental fiscal system after an analysis of Federal Accounts Allocation Committee (FAAC) records indicated that approximately ₦201.962 billion in statutory allocations due to the 30 Local Government Areas of Osun State remained unreleased over a 15-month period spanning March 2025 to May 2026.
The prolonged withholding of the funds has become the centre of an intense legal and political battle involving the Federal Government, the Osun State Government, and the opposition All Progressives Congress (APC) following the disputed February 2025 local government elections.
While the Osun State Government maintains that the withheld allocations have disrupted grassroots governance and essential public services, the APC argues that questions surrounding the legitimacy of the local government election justified legal challenges. The matter has also generated conflicting court proceedings and constitutional interpretations.
FAAC Records Show Nearly ₦202 Billion Withheld
A review of official FAAC allocation figures indicates that statutory allocations due to Osun’s local governments accumulated to nearly ₦202 billion during the review period.
The figures show that:
2025 Withheld Allocations
Between March and December 2025, allocations totaling ₦131.5 billion were reportedly not released.
Monthly figures include:
- March – ₦11.9 billion
- April – ₦11.2 billion
- May – ₦11.7 billion
- June – ₦12.1 billion
- July – ₦12.8 billion
- August – ₦14.0 billion
- September – ₦14.4 billion
- October – ₦15.8 billion
- November – ₦14.6 billion
- December – ₦13.09 billion
2026 Withholding Continued
The withholding continued into 2026 despite ongoing court proceedings.
Between January and May 2026, an additional ₦70.462 billion was reportedly withheld.
The monthly breakdown shows:
- January – ₦14.060 billion
- February – ₦14.502 billion
- March – ₦12.8 billion
- April – ₦13.7 billion
- May – ₦15.4 billion
Combined, the figures amount to approximately ₦201.962 billion.
Political Dispute at the Centre of the Crisis
The controversy traces its roots to the February 2025 local government elections conducted in Osun State.
Following the polls, the APC challenged the election, questioning its validity.
Subsequently, statutory allocations meant for the state’s local governments were reportedly withheld pending the resolution of the dispute.
The Osun State Government has consistently alleged that political considerations influenced the continued withholding of the funds, an allegation the APC has repeatedly denied.
The opposition insists that its position has always been based on legal concerns surrounding the conduct of the election rather than political interests.
Supreme Court Weighs In
The legality of the withholding later came before the Supreme Court.
According to reports of the judgment, the apex court held that withholding constitutionally allocated local government funds amounted to a violation of constitutional provisions governing fiscal federalism.
Justice Mohammed Idris, in the lead judgment as reported, reportedly described the action as a “grave breach of the 1999 Constitution” and directed that local government allocations should be paid directly into the respective local government accounts.
The court also reportedly dismissed contempt proceedings initiated against the Osun State Government by the Attorney-General of the Federation, while making observations regarding the constitutional obligations of parties in the dispute.
However, the Supreme Court also noted that the Osun State Attorney-General did not demonstrate that he obtained formal authorisation from the affected local governments before commencing the legal action.
In a dissenting opinion, Justice Emmanuel Agim reportedly maintained that the Attorney-General possessed the legal authority to institute the action and warned that prolonged withholding of allocations could cripple local government administration.
Parallel Court Proceedings Add Complexity
The controversy has been further complicated by separate litigation before other courts.
In September 2025, the High Court of Justice in Oyo State reportedly granted an interim order restraining United Bank for Africa (UBA) Plc from releasing statutory allocations belonging to Osun’s local governments pending determination of the substantive suit.
That litigation remains one of several legal proceedings connected with the allocation dispute.
Impact on Local Governance
Governor Ademola Adeleke has repeatedly argued that the withheld funds are critical for financing grassroots administration across Osun State.
According to the governor, the allocations are required to meet obligations including:
- Salaries of primary school teachers;
- Wages of nurses and health personnel;
- Operations of 332 primary healthcare centres;
- Local government staff salaries;
- Traditional council administration;
- Pension obligations.
State officials argue that prolonged withholding of the allocations has adversely affected service delivery at the local government level.
Public Protests Over Withheld Funds
Public frustration over the issue has also manifested in protests.
Earlier this year, residents demonstrated at branches of United Bank for Africa (UBA) in Osogbo and Ilesa, accusing the financial institution of participating in the continued withholding of local government funds.
The bank has not publicly accepted responsibility for the allegations, while the matter remains intertwined with ongoing legal proceedings.
Questions Over Fiscal Federalism
Constitutional and public finance experts say the dispute raises broader questions about Nigeria’s fiscal federalism and the autonomy of local governments.
The controversy also highlights continuing tensions surrounding the implementation of judicial decisions relating to local government financial independence following recent constitutional interpretations by the Supreme Court.
Analysts note that prolonged uncertainty over statutory allocations could significantly affect grassroots governance, service delivery and public confidence in constitutional institutions.
As litigation continues and political disagreements persist, nearly ₦202 billion in disputed local government allocations has become one of the country’s most significant intergovernmental fiscal controversies.
While the Federal Government, Osun State Government and opposition parties continue to defend their respective positions, local governments remain at the centre of a dispute whose outcome may have lasting implications for local government autonomy, constitutional governance and public financial administration in Nigeria.
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