The bank accounts of the Osun State Government have again been placed under restriction, some weeks after the Economic and Financial Crimes Commission (EFCC) lifted a freeze on some of the state’s accounts following President Bola Tinubu’s intervention.
Punch reported that the latest restriction followed an application by Gamji Nigeria Company Limited seeking to preserve funds belonging to the state over a $13.9 million arbitration award arising from water infrastructure projects in Ilesa West Local Government Area.
Judge Daniel Osiagor of the Federal High Court in Lagos in a suit marked FHC/L/CS/1233/2026, ordered commercial banks to place a “Post No Debit” restriction on the state government’s accounts.
The order covers funds up to $13.9 million and N157.5 million, pending the hearing and determination of Gamji’s motion on notice.
Affected banks 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.
The development comes about months after the EFCC restricted Osun government accounts during the build-up to the 15 August governorship election.
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👉 JOIN WHATSAPP CHANNELIn that earlier case, the anti-graft agency restricted the state’s Federal Allocation Account domiciled with First Bank and two joint allocation accounts with Zenith Bank over an investigation into the alleged handling of about N11 billion in Ecology Funds, Intervention Funds and Federation Account Allocation Committee allocations.
The EFCC said it acted after detecting what it described as suspicious movements of funds from the accounts, while the Osun government rejected the allegation and described the restriction as politically motivated.
The timing of that restriction became particularly controversial because it occurred 10 days before the governorship election, which Governor Ademola Adeleke contested on the platform of the Accord Party against the All Progressives Congress candidate, Bola Oyebamiji.
President Tinubu subsequently directed the EFCC to vacate the restriction, saying the timing of the action was capable of creating an impression that a federal agency was being used to interfere with the election. The accounts were eventually unfrozen on 22 August.
The latest restriction, however, is unrelated to the EFCC investigation.
– Why The Latest Accounts Were Restricted
The latest case arose from two contracts awarded by the Osun State Government then led by former Governor Adegboyega Oyetola (the incumbent minster of marine and blue economy) to Gamji in June 2017 for water infrastructure works in Ilesa West.
One contract involved the construction of transmission mains and booster pump stations, while the second covered the construction of water reservoirs under a water supply and sanitation project.
According to court documents filed by Gamji, the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
The original value of the first contract was $15.98 million, while the second was valued at $9.70 million.
Gamji said subsequent changes to engineering designs and variations in the scope of the works resulted in delays and increased project costs.
The company said the contract values were subsequently revised to $20.24 million for the first project and $10.95 million for the second.
Gamji further claimed that about 93 per cent of the work had been completed by October 2023 and that the Osun government issued a Substantial Completion Certificate on 14 November 2024.
Disagreements later emerged between the company and the state government over extensions of time, price adjustments and increased costs of materials and labour.
Gamji said its claims were rejected by the state government and that attempts to resolve the dispute through mediation failed.
The company subsequently issued an arbitration notice on 3 April 2025.
The state government accepted the arbitration process and nominated its arbitrator, leading to preliminary proceedings in Lagos on 15 May 2025.
According to Punch’s report, the arbitral panel eventually issued its final award on 24 July 2026, directing the Osun government 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 read in part.
The award also provided for 20 per cent annual interest on any outstanding balance after the deadline for compliance.
Gamji told the court that the deadline expired on 24 August without payment of the awarded sums.
It subsequently approached the Federal High Court in Lagos seeking an order to preserve funds in the state government’s accounts pending enforcement of the award.
However, Judge Osiagor granted the interim application and directed the listed banks to place the accounts under “Post No Debit” restriction to preserve funds towards the liquidation of the arbitral award.
The order is interim and does not finally determine the substantive application before the court. The court adjourned the case until 22 October 2026 for hearing of the motion on notice.
The Osun State Government has yet to respond publicly to the court order.
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