Reported By Mary Udezue | Edited by: Gabriel Osa
A protracted dispute over local government allocation payments in Osun State has left thousands of grassroots public servants and pensioners in economic distress, with reports indicating severe hardship for teachers, nurses, health workers, council employees and retirees after statutory funds valued at an estimated ₦130 billion have gone unreleased since early 2025.
The crisis stems from a political and legal conflict triggered by the February 2025 local government elections in Osun, which were followed by litigation over the legitimacy of elected council leadership. Both the Federal Government and the Osun State Government contend with rival claims over control of local government secretariats and accounts, leading to the withholding of statutory allocations traditionally shared from the Federation Account to local councils. Federal authorities — including the Attorney-General of the Federation — asserted that releases could not proceed amid uncertainty over which officials have lawful mandate, prompting central government agencies to refrain from disbursing the funds.
The withheld allocations, amounting to about ₦130 billion and spanning many months of statutory revenue from February 2025 onwards, are meant to fund the operations of the state’s 30 local government councils. These funds are constitutionally allocated and are critical to the payment of salaries and pensions for primary school teachers, nurses and other healthcare personnel, council staff, traditional councils and retirees across Osun.
According to local reports, the prolonged freeze on allocations has resulted in severe economic hardship for many workers and pensioners. Council workers and retirees describe being without regular income for more than a year, forcing some to incur debt, borrow from relatives or depend on informal support networks just to meet basic needs such as food, rent, school fees and healthcare. Many retirees, who depend exclusively on monthly pension entitlements, have been left destitute.
The Osun State Government, led by Governor Senator Ademola Nurudeen Adeleke, has repeatedly condemned the continued withholding and called for the immediate release of the funds. In January 2026, Adeleke described the situation as an “illegal siege” on local government secretariats and grassroots administration, asserting that the failure to disburse the allocations is crippling basic governance and inflicting hardship on the most vulnerable residents. He appealed for federal intervention to ensure funds reach their intended accounts.
The state government has also pointed to court decisions that affirmed the legitimacy of the elected local government chairmen and councillors following the 2025 elections, contending that the statutory allocations should accordingly be released to the rightful recipients. However, former political officeholders linked to the All Progressives Congress (APC) have continued to occupy council secretariats, a situation described by Osun authorities as unconstitutional and contributing to the impasse.
In December 2025, the Supreme Court of Nigeria addressed a lawsuit filed by the Osun State Government aimed at compelling the federal government to release the withheld allocations. Although the apex court acknowledged that the withholding of funds constituted a breach of the Constitution, it struck out the suit on procedural grounds — holding that the State Attorney-General lacked the legal standing to file on behalf of the local governments. The court emphasised that statutory allocations should be made directly to the councils but ruled that only duly authorised local government officials have the capacity to institute such legal action.
The ruling, delivered by a majority panel of justices, has complicated efforts to secure federal compliance with earlier directives on allocation payments. A dissenting judge underscored that withholding funds undermines local government operations, noting that obstruction of statutory revenue significantly cripples governance at the grassroots.
Political and civil society voices have also weighed in. Critics contend that the prolonged impasse threatens service delivery and erodes public confidence in democratic institutions, while legislative actors have urged the Federal Government to release allocations and respect constitutional mandates. The House of Representatives Minority Caucus has called on President Bola Ahmed Tinubu to direct immediate payments to local councils, warning that continued delays would further compound socio-economic distress in Osun communities.
Efforts to freeze bank accounts linked to rival local government claimants have also featured in legal proceedings, with an Oyo State High Court issuing orders for the United Bank for Africa (UBA) to suspend debit operations on accounts tied to contested council leadership in October 2025. This measure was intended to protect the disputed funds pending judicial resolution, although it further entrenched financial constraints on local administration.
The ongoing dispute highlights structural vulnerabilities within Nigeria’s federal fiscal architecture, particularly in relation to local government autonomy, revenue allocation and the enforcement of judicial pronouncements. Analysts warn that without a durable resolution that respects constitutional provisions and clarifies authority over local government finances, public sector workers, retirees and citizens at the grassroots will continue to bear the brunt of political and administrative deadlock.
Despite calls for dialogue and institutional clarity, no definitive timeline has been announced for the release of the funds or a comprehensive policy solution. Workers remain without pay, and pensioners persist in hardship as the standoff continues.
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