Oye Accuses FG of Retaining Account Revenue Before Sharing

Chairman of the Alliance for Economic Research and Ethics, Dele Oye, accused the Federal Government on Sunday of retaining a substantial portion of Federation Account revenue before distributing funds to states and local government councils, saying the practice of deductions at source was depriving subnational governments of funds they were constitutionally entitled to receive.

Oye said the pattern of deductions at source had been a persistent feature of Nigeria’s intergovernmental fiscal architecture, with significant sums being set aside for transfers, interventions, and refunds before the distributable pool was calculated. He argued that this practice fundamentally distorted the fiscal federalism that the constitution envisages, leaving state governments and local councils perpetually starved of resources they needed to deliver services.

FAAC Data Supports the Concern

The concern gains traction in light of the latest FAAC distribution data. In May 2026, FAAC shared N2.3 trillion among the federal government, states, and local councils, but the gross revenue available for the month stood at N3.395 trillion. After deducting N123.546 billion as cost of collection and setting aside N971.610 billion for transfers, interventions, and refunds, the distributable amount was reduced to N2.3 trillion, representing just over two-thirds of total gross revenue.

Oye called for greater transparency in how these deductions are calculated and deployed, arguing that the opacity surrounding transfers and refunds created opportunities for misallocation that affected service delivery at the grassroots level.

States Demand Better Accountability

Furthermore, some state governors have raised similar concerns in previous fiscal federalism debates, arguing that the federal government’s deductions from the gross revenue pool must be subject to independent verification and public reporting. The Revenue Mobilisation Allocation and Fiscal Commission has previously flagged concerns about the growing size of first-line charges reducing the amount available for distribution. Consequently, Oye’s public accusation is likely to reignite debate about fiscal transparency in Nigeria’s revenue sharing framework ahead of the 2027 elections.