ActionAid Demands Accountability For N34trn Deductions

ActionAid Nigeria has raised alarm over what it described as institutionalised revenue erosion in Nigeria’s public finance system.

It called for urgent accountability on the over N34 trillion deducted from government revenue before distribution to the Federation Account.

The organisation’s position followed recent findings by the World Bank that over 40 per cent of Nigeria’s federal revenue in recent years was deducted before being shared among federal, state and local governments.

In a statement issued to journalists yesterday in Abuja, ActionAid Nigeria said the scale of deductions highlights deepening fiscal challenges, including rising debt burdens and persistent weaknesses in public financial management.

According to the group, while Nigeria’s revenue has grown in recent years, the sharp increase in pre-distribution deductions has significantly reduced funds available for public investment, widening the gap between gross earnings and distributable income.

The organisation warned that if the estimated 41 per cent of revenue currently absorbed through deductions had been transparently managed, Nigeria’s reliance on borrowing could have been substantially reduced.

It cited projections by the International Monetary Fund that Nigeria’s debt-to-GDP ratio may rise to 33.1 per cent by 2027.

ActionAid Nigeria described the situation as both a governance failure and a missed opportunity to strengthen fiscal stability, noting that the trend reflects structural inefficiencies in the country’s revenue management system.

It said complex and fragmented channels through which revenues pass before reaching the Federation Account continue to erode fiscal space, particularly for state and local governments.

The organisation also expressed concern about limited public disclosure regarding the composition and utilisation of these deductions, citing opacity in cost-of-collection frameworks and in agency remittances.

It noted that weak scrutiny by subnational governments further undermines accountability.

It further raised concerns about transparency in public expenditure, citing the recently commissioned Nigeria Revenue Service building, whose total cost and procurement details remain undisclosed.

Beyond fiscal implications, ActionAid Nigeria warned that declining public revenue weakens government capacity to invest in critical sectors such as security, social protection, and infrastructure, thereby worsening poverty, unemployment, and social instability.

Speaking on the development, the Country Director of ActionAid Nigeria, Andrew Mamedu, said the consequences for citizens are severe.

“For millions of Nigerians, the impact is immediate. At a time of rising inflation and economic hardship, reduced public resources translate into fewer investments in essential services and limited support for vulnerable populations,” he said.

Mamedu added that the situation represents not just a fiscal concern but a matter of justice, stressing that the lack of transparency in revenue management denies citizens access to basic services such as healthcare and education.

The organisation warned that continued, unchecked deductions pose a threat to equitable development, fiscal stability, and public trust, cautioning that Nigeria risks entrenching a system in which resources are consistently depleted before delivering meaningful impact.

ActionAid Nigeria called on the Federal Government to urgently conduct a comprehensive and transparent review of all revenue deduction frameworks, ensuring full disclosure and accountability.

It also demanded the publication of detailed breakdowns of all deductions, strengthened independent oversight of revenue-generating agencies, and reforms to eliminate inefficiencies and systemic leakages.

The group further advocated for an independent forensic audit of all deduction mechanisms to restore public confidence in fiscal governance.

It urged the National Assembly to intensify its constitutional oversight through public hearings and scrutiny of deduction structures, while calling on state governments, civil society, the media, and citizens to demand greater transparency and accountability.

ActionAid Nigeria emphasised that the country’s development depends not only on revenue generation but also on transparency, equity, and integrity in the management of public resources.