By Muhammad Mamman
The Federal Government has abolished the long-standing practice of revenue-generating agencies retaining portions of the funds they collect, directing that all revenues be paid in full into the Federation Account.
Announcing the reform in Abuja on Wednesday, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the move aims to boost transparency and ensure that more funds are available for national and subnational development.
He noted that despite Nigeria’s rising revenues, significant amounts had been withheld by agencies such as the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to cover collection costs — with little visible impact on national growth.
“Most of those deductions have now been removed once and for all,” Edun stated. “The Constitution is clear — all revenues must flow into the Federation Account and be distributed accordingly.”
The minister added that the directive forms part of President Bola Tinubu’s broader fiscal reform agenda, aimed at improving efficiency in public finance management.
Edun also highlighted progress in social protection programmes under the Renewed Hope Agenda, assuring that measures are in place to cushion the impact of ongoing economic reforms.
According to him, around 10 million households — representing 50 million Nigerians — will have benefitted from direct cash transfers by the end of October, with plans to extend support to 50 million households before the end of the year.
The decision effectively ends a funding system that allowed agencies like the NUPRC, FIRS, and NCS to retain between four and seven percent of the revenues they collected — a practice critics say encouraged inefficiency and reduced funds available for public use.
