Osun account freeze puts EFCC’s investigative powers under legal scrutiny

…Opposition party, ADC kicks against move

…We froze Osun account over ‘fraudulent handling’ of N11bn ecological funds -EFCC

The Economic and Financial Crimes Commission’s restriction of an Osun State Government statutory allocation account has triggered a legal debate over the extent of the agency’s power to freeze accounts without prior judicial authorisation, with legal experts pointing to a 72-hour limit for temporary investigative restrictions.

The controversy centres on whether the EFCC can sustain the post-no-debit order beyond the initial 72-hour period without obtaining a court order, particularly as the affected account belongs to a state government and holds funds meant for public expenditure.

The EFCC, in a letter dated August 5, 2026, directed First Bank to place a post-no-debit restriction on the Osun State Government Statutory Allocation account, pending the conclusion of an ongoing investigation.

The letter, signed by Adenike Babalola, an assistant commander of the commission, for the Director of Investigation, cited Sections 38(1) and (2) of the EFCC (Establishment) Act, 2004, and Section 24 of the Money Laundering (Prevention and Prohibition) Act, 2022.

Offering further clarification in another press statement, EFCC explained that it froze the bank account of the Osun State Government over alleged fraudulent handling of N11 billion ecological and intervention funds.

“These ongoing investigations of the state government would not have warranted any placement of Post No Debit order on its account but for the precipitate and unwarranted movement of funds from the accounts to different suspicious accounts since August 2, 2026,” the statement reads.

“The commission noticed huge transfers of funds into different corporate entities and had to swiftly halt the trend by freezing the accounts from which such heavy funds are being moved.

“The EFCC’s preventive mandate is a public-inclined framework of safeguarding public funds, assets and resources.

“The commission cannot watch idly while a state government’s account is being pillaged.”
Legal experts who spoke on the development said Nigerian appellate decisions recognise a distinction between a temporary stop order imposed during an investigation and a continuing freeze that requires judicial approval.

In EFCC v. Attorney-General of Benue State, the Court of Appeal held that the anti-graft agency could place a stop order on an account suspected to be connected with financial crime for 72 hours without a court order. Beyond that period, however, the commission must obtain a court order if it intends to maintain the restriction.

Read also: Osun 2026: Imole campaign council proposes state honours for victims of electoral violence

The appellate court made clear that once the 72-hour period expires without the necessary judicial authorisation, the restriction lapses and the financial institution is required to restore normal access to the account.

That position creates a significant legal question for the Osun case, given that the EFCC’s latest letter follows an earlier correspondence dated April 15 and does not specify a termination date for the restriction.

Yinka Oyesomi, a lawyer, said the EFCC undoubtedly possesses broad investigative powers, but those powers must be exercised within statutory and constitutional limits.

He said the restriction of a state government’s statutory allocation account without judicial authorisation raised “serious constitutional and administrative law questions”, particularly because the funds are intended for the discharge of governmental responsibilities.

“Any administrative action capable of paralysing those constitutional functions must satisfy a very high threshold of legality, necessity, and proportionality,” he said.

Oyesomi said the eventual determination would depend on how the court interprets the interaction between the EFCC Act, the Money Laundering Act and constitutional protections governing property and the autonomy of subnational governments.

A second lawyer, who asked not to be named, also questioned the legal basis for an indefinite restriction without a court order.

She said while the EFCC could temporarily restrict an account during an investigation, the restriction could not ordinarily continue beyond the statutory period without judicial intervention.

“If it is based on an ongoing investigation, then it should be for 72 hours only,” she said.

She also questioned the provisions cited by the EFCC in its letter, arguing that Sections 38(1) and (2) of the EFCC Act primarily concern the commission’s access to financial information and records and do not, in her view, provide an unrestricted power to freeze an account.

Read also: ‘Political terrorism’: ADC condemns Osun council allocation freeze

The African Democratic Congress (ADC), an opposition party, has condemned the freezing of local government allocations to Osun State, describing it as “political terrorism” and accusing the federal government of weaponising state institutions to punish the people of the state.

In a statement on Wednesday, Bolaji Abdullahi, the party’s national publicity secretary, said President Bola Tinubu’s alleged “win-at-all-cost” approach to politics poses a grave threat to Nigeria’s democracy and national stability.

The ADC said the withholding of local government funds forms part of a broader campaign of intimidation, which includes the continued occupation of local government councils by unelected APC loyalists, the arrest of opposition figures, the alleged use of armed political thugs backed by security agencies, and what he described as a coordinated effort to destabilise Osun State through federal institutions.

The ADC said, “This sinister move confirms that the Tinubu-led federal government will do anything, including starving the people of Osun State, to achieve its political objectives. No democracy worthy of its name deliberately sacrifices the welfare of innocent citizens in pursuit of partisan political interests.”

The ADC argued that the withholding of council allocations has directly affected workers’ salaries, primary healthcare services, education, rural infrastructure and other essential public services, accusing the federal government of turning citizens’ welfare into a political bargaining tool.

The party further criticised what it described as Tinubu’s tendency to treat political contests as warfare.
The legal position is further complicated by the fact that the Court of Appeal in the Benue case rejected the argument that state government accounts were categorically immune from EFCC restrictions. The court held that such accounts could be subjected to a temporary investigative stop order where the statutory requirements were met, but maintained the 72-hour limit in the absence of a court order.

The Osun State Government has now moved to challenge the EFCC action in court. Governor Ademola Adeleke said he had instructed the state Attorney-General to institute proceedings at the Federal High Court in Osogbo.

Adeleke described the restriction as an attack on the constitutional rights of subnational governments and alleged that it was imposed without a court order.

“We are supposed to be in a democracy, where the Rule of Law must always prevail. We will therefore, not accept a situation where federal agencies trample on the constitutional rights of subnational governments,” the governor said.

He demanded an explanation from the EFCC chairman, asking the commission to disclose why the account was restricted and provide evidence supporting the action.

The political timing has added another layer to the dispute. The restriction came just 10 days before the August 15 Osun governorship election, in which Adeleke is seeking re-election on the Accord Party platform. The governor has alleged that federal authorities are targeting members of his party and administration ahead of the election.

The APC Campaign Committee, however, defended the EFCC intervention, accusing the Adeleke administration of using public funds for vote buying.

Kehinde Ayantunji, a member of the committee, alleged that the state’s payments to workers and pensioners, which the government describes as palliatives, were connected to electoral mobilisation.

“Governor Ademola is rewriting the history of electoral fraud in Nigeria because what has happened is unprecedented in our electoral history, for a state government not only to have the guts to buy votes but to use the government fund to buy votes,” he said.

The Adeleke administration has rejected the allegation, maintaining that its palliative payments are part of its worker-welfare programme.

The governor said his administration had made another round of payments to workers and pensioners to cushion the impact of economic hardship, arguing that Osun had introduced periodic palliatives even before the implementation of the new national minimum wage.

The dispute therefore presents the courts with a question that goes beyond the immediate political confrontation in Osun: how far can an anti-corruption agency go in restricting public funds while exercising its investigative powers, and at what point does that power require judicial oversight?