Osun APC Alleges Unlawful N300 Billion Loan Plot Using Local Councils as Collateral

Osun APC accuses Governor Adeleke of a secret N300 billion loan plot using local councils as collateral, citing violations of Supreme Court autonomy rulings.

By: AXL Media

Published: Mar 10, 2026, 6:40 AM EDT

Source: The information in this article was sourced from Daily Post Nigeria

Allegations of Secret Financial Maneuvering at the State Secretariat

The All Progressives Congress in Osun State has raised an alarm over an alleged clandestine meeting held on Monday at the State Secretariat in Abere. According to APC Chairman Tajudeen Lawal, the Adeleke administration convened senior administrative officers and local government chairmen to discuss a massive borrowing plan. The opposition alleges that the state government intends to secure a N300 billion loan facility, with the strategy involving the use of each of the 30 local government councils as collateral for the debt. This purported arrangement has sparked immediate concerns regarding the transparency and legality of the state’s current fiscal direction.

Constitutional Autonomy and the Legality of Council Collateral

A central pillar of the APC’s challenge is the assertion that using local governments as collateral for state-level borrowing is a direct violation of the law. Chairman Lawal argued that such a move disregards the Supreme Court’s affirmation of local government autonomy, which restricts the state’s power to pledge council assets or revenues. The party maintains that any borrowing linked to these local authorities requires a level of independent executive approval that the current administration has allegedly bypassed. By tying approximately N10 billion in debt to each individual council, the opposition warns that the state is creating an unsustainable financial burden on local administrations.

Warnings to Financial Institutions Regarding Null Agreements

The opposition has extended its warning to the private sector, specifically targeting the management of Unity Bank Plc. Lawal cautioned that financial institutions should be mindful of the legal limits of subnational borrowing powers, asserting that states lack the authority to use local government entities as security for loans. Furthermore, the APC claims that only the council executives reinstated by the Court of Appeal are the legitimate administrators recognized by law. Consequently, the party argues that any financial agreements entered into with the current PDP-aligned council chairmen would be legally null and void, potentially exposing lenders to significant risk.