The Nigerian Bar Association (NBA) has criticised the Economic and Financial Crimes Commission (EFCC) over the restriction placed on the Osun State Government’s statutory allocation account, describing the action as potentially unconstitutional and capable of crippling governance.
The NBA President, Afam Osigwe (SAN), said the anti-graft agency could investigate suspicious transactions and seek court orders against specific accounts but lacked the authority to impose a blanket restriction on a state government’s finances without following due legal process.
CityNews had earlier reported that the EFCC had directed First Bank to place a Post-No-Debit restriction on the Osun State Government’s statutory allocation account pending the conclusion of an investigation into the alleged mismanagement of about ₦11 billion.
The directive was contained in a letter dated August 5, 2026, signed by an Assistant Commander of the commission, Adenike Babalola, on behalf of the Director of Investigation.
The letter, referenced 3000/EFCC/ABJ/HQ/PFS/TA/OSUN/VOL.17/666, was addressed to the Managing Director of First Bank, with the Chief Compliance Officer listed for attention.
It identified the affected account as “Osun State Government Statutory Allocation,” with account number 2017170947.
EFCC Alleges Suspicious Transfers
Explaining its action in a statement on Wednesday night, the EFCC said the restriction followed the movement of funds from the state government’s accounts into what it described as suspicious corporate accounts.
The statement, signed by the commission’s Head of Media and Publicity, Dele Oyewale, said the agency had been investigating the Osun State Government since March 2026 over the alleged fraudulent handling of Ecology Funds, Intervention Funds and Federal Account Allocation Committee allocations totalling about ₦11bn.
The commission said some state officials, including the Accountant-General, had been questioned by investigators.
According to the EFCC, the investigation would not ordinarily have led to the restriction but for the movement of large sums detected from August 2.
The commission said, “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 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 anti-graft agency rejected claims that the timing of the action was connected to the August 15 governorship election in Osun State.
It maintained that the approaching election could not prevent it from carrying out its statutory responsibilities or protecting public funds.
The statement read, “While the commission is fully aware of the impending governorship election in Osun State, it has a responsibility to act in defence of the sanctity of the funds of the state.
“It will be uncharitable for the commission to allow an excuse of an upcoming election to fold its arms and not perform its legally assigned functions.”
The EFCC added that Osun was not the only state under investigation, noting that several other states were also being scrutinised over alleged financial irregularities.
“The commission has always pointed out that it is non-partisan and non-sectarian but always working in the overall interests of Nigerians,” it stated.
It urged Nigerians to disregard what it called attempts to portray the investigation as politically motivated.
“The public is enjoined to ignore false narratives and deliberate demonisation of the works of the EFCC. The interests of all Nigerians are greater and will always be protected by the commission,” it added.
NBA Warns Against Grounding Government
Reacting in an interview with Punch on Wednesday, Osigwe said restricting withdrawals from a state government’s account could halt public services and interfere with the constitutional responsibilities of the administration.
He said, “No government agency or any person has the right or the power to restrict withdrawals from the account of any state because, first of all, the order has the effect of grounding the activities of a government.
“If the EFCC knows that any particular account is being used for the purpose of fraud, it may be able to obtain a court order, but it cannot make a blanket order freezing the accounts of any state.”
The NBA president said such a restriction could amount to an abuse of power if it was not founded on a valid judicial order.
“Such an order would be unconstitutional and also violate the powers of the EFCC and may actually amount to an abuse of power. We should not have such a situation,” he added.
Osigwe maintained that any decision to restrict the account of an individual, institution or government must be based on clear evidence and supported by a court order.
“If there is a need to freeze the account of a person or government, there is a need to provide a proper basis for it and get a proper order,” he stated.
Although he said he had not independently confirmed the directive, the senior advocate advised financial institutions not to obey an unlawful blanket restriction.
“I don’t think it would be proper if indeed the EFCC made such an order. I’m not aware of it, but if they made such an order, I would advise that no bank should obey such an order,” he said.
Lawyers Demand Judicial Approval
Another Senior Advocate of Nigeria, Adeyinka Olumide-Fusika, also questioned the legality of the Post-No-Debit restriction, saying the EFCC must obtain judicial approval before freezing an account.
“There is a no-debit order on Osun State’s account. My question is: Does the EFCC have the power to do that? I don’t think they got any order from the court,” he said.
Olumide-Fusika argued that Nigerian courts had repeatedly held that anti-graft agencies could not unilaterally freeze bank accounts without a valid court order.
“The courts have been consistent on that: don’t do it without a court order. Anybody can go to court to seek an order, but the decision belongs to the court,” he stated.
He acknowledged that concerns over the possible use of state funds for electioneering could have informed the agency’s action but insisted that preventive measures must comply with the law.
Isiaka Olagunju (SAN) also described the restriction as a serious breach of the 1999 Constitution and the principles of federalism.
Olagunju said, “The EFCC’s action is a serious infraction of the Constitution of the Federal Republic of Nigeria, 1999, as amended.
“If at all there is an allegation of embezzlement against any official of a state, the EFCC needs to be specific instead of obtaining a blanket order freezing the funds of the state.”
He warned that preventing a state from accessing its statutory funds could undermine its ability to pay salaries, fund public services and discharge other constitutional responsibilities.
However, Professor Damilola Olawuyi (SAN) said temporary account restrictions were recognised tools for preventing economic and financial crimes, provided they were applied lawfully.
“The EFCC has inherent statutory powers to take anticipatory measures to prevent and eradicate the commission of economic and financial crimes,” Olawuyi said.
He explained that account freezing had become an internationally recognised method for disrupting illicit financial flows, money laundering and terrorism financing.
The senior lawyer, however, warned that the power must not be abused or deployed for political purposes.
He said such powers “should not be used as a cudgel to settle political scores, neither should they be used as a substitute for proper investigations or a tool to block legitimate transactions.”
