Court Restricts Osun State Government Bank Accounts Again

The bank accounts of Osun State Government have been restricted again. This comes a few weeks after the Economic and Financial Crimes Commission (EFCC) lifted a freeze on some accounts due to President Bola Tinubu's intervention.

Punch reported that the new restriction followed a request by Gamji Nigeria Company Limited. They want to protect funds belonging to the state related to a $13.9 million arbitration award from water projects in Ilesa West Local Government Area.

Judge Daniel Osiagor of the Federal High Court in Lagos made the order in case number FHC/L/CS/1233/2026. He told commercial banks to place a "Post No Debit" restriction on the state’s accounts.

The order covers funds totaling $13.9 million and N157.5 million, while Gamji's motion is heard and decided. Banks affected include Guaranty Trust, Access Bank, First HoldCo, Zenith Bank, United Bank for Africa, Ecobank, Fidelity Bank, Stanbic IBTC, Sterling Bank, Union Bank, and Wema Bank, among others.

This new restriction comes months after the EFCC froze some of Osun’s accounts during the lead-up to the governorship election on 15 August. In that case, the EFCC restricted the state’s Federal Allocation Account at First Bank and two joint accounts with Zenith Bank. This was part of an investigation into how about N11 billion in various funds was handled.

The EFCC claimed to have noticed suspicious movements in the accounts. The Osun government rejected these claims, saying the restriction was politically motivated. This restriction became controversial as it happened just 10 days before the election, where Governor Ademola Adeleke ran for office with the Accord Party against Bola Oyebamiji of the All Progressives Congress.

President Tinubu later ordered the EFCC to lift the restriction. He said the timing could give the impression that a federal agency was interfering with the election. The accounts were unfrozen on 22 August.

The latest restriction is not related to the EFCC investigation. It involves two contracts given by the Osun State Government, then led by former Governor Adegboyega Oyetola, to Gamji in June 2017 for water infrastructure works in Ilesa West.

One contract was for building transmission mains and booster pump stations. The other was for constructing water reservoirs as part of a water supply and sanitation project. According to court documents from Gamji, these projects were financed through an Islamic Development Bank loan arranged by the Federal Ministry of Finance.

The first contract was originally worth $15.98 million. The second was valued at $9.70 million. Gamji said changes to engineering designs and variations in work scope caused delays and increased costs.

Gamji claimed the contract values were revised to $20.24 million for the first project and $10.95 million for the second. They also stated that about 93 percent of the work was done by October 2023. The Osun government issued a Substantial Completion Certificate on 14 November 2024.

Disputes later arose over time extensions, price changes, and increased material and labor costs. Gamji said the state government rejected its claims. Attempts to mediate the disagreement failed. The company issued an arbitration notice on 3 April 2025.

The state government agreed to the arbitration process and nominated its arbitrator. Preliminary proceedings took place in Lagos on 15 May 2025. According to Punch’s report, the arbitral panel announced its final award on 24 July 2026, directing Osun to pay Gamji $13 million and N157.5 million in reimbursable arbitration fees.

“A preservation order of interim injunction is granted directing the cited financial institutions in Nigeria to immediately place a Post No Debit restriction on the Respondent’s account domiciled with them for the preservation of the funds with them in the sum of $13,924,343.32 and N157,500,000.00 towards the liquidation of the Arbitral Award dated 24th July, 2026 which has become due and enforceable, pending the hearing and determination of the motion on notice,” the order stated in part.

The award also includes a 20 percent annual interest on any outstanding balance after the compliance deadline. Gamji told the court that the deadline expired on 24 August without payment of the awarded sums.

They went to the Federal High Court in Lagos to get an order to preserve funds in the state government’s accounts while enforcing the award. Judge Osiagor granted the interim application and told the listed banks to place the accounts under "Post No Debit" restriction.

This order is temporary and does not resolve the main application before the court. The case is adjourned until 22 October 2026 for the hearing of the motion on notice. The Osun State Government has not publicly responded to the court order.