Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has disclosed that monthly allocations from the Federation Account Allocation Committee (FAAC) have risen above ₦2 trillion following recent economic reforms introduced by President Bola Tinubu’s administration.
Oyedele explained that the increase is largely due to policy changes such as the removal of fuel subsidy and exchange rate unification, which have boosted government revenue. He noted that while the reforms have expanded fiscal space, they also present challenges that require careful management.
“FAAC allocations now exceed ₦2 trillion monthly. This is a direct outcome of reforms aimed at improving transparency and efficiency in revenue generation,” Oyedele said during a policy briefing.
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The FAAC is responsible for distributing revenue among the federal, state, and local governments. Analysts say the surge in allocations has provided states with more funds for development projects, but concerns remain about how effectively the money is being utilised.
Civil society organisations have urged state governments to channel the increased allocations into infrastructure, education, and healthcare rather than recurrent expenditure. They argue that without accountability, the additional revenue may not translate into tangible benefits for citizens.
Economists also caution that while higher allocations are positive, Nigeria must address inflationary pressures and ensure that fiscal gains are not eroded by rising costs. They emphasise the need for structural reforms to diversify the economy and reduce dependence on oil revenues.
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Oyedele acknowledged these concerns, stressing that the reforms are part of a broader plan to stabilise Nigeria’s economy. He added that the committee is working on measures to simplify the tax system, improve compliance, and reduce leakages.
“The reforms are not just about increasing revenue. They are about creating a sustainable framework that supports growth and development,” he said.
State governors have welcomed the higher allocations, noting that they provide opportunities to expand social programmes and address pressing needs. However, some governors admitted that rising wage bills and debt obligations continue to strain finances.
Observers believe the coming months will test the ability of both federal and state governments to manage the increased funds responsibly. Transparency in spending and stronger oversight mechanisms are seen as critical to ensuring that the reforms deliver long-term benefits.
For citizens, the impact of the reforms remains mixed. While government revenues have grown, many Nigerians continue to grapple with higher living costs due to subsidy removal and exchange rate adjustments.
As debates continue, Oyedele reiterated that the reforms are necessary to reposition Nigeria’s economy. He urged patience, noting that the benefits would become clearer as government institutions strengthen and fiscal discipline improves.
