Agbakoba Decries Fiscal Leak, Excessive Borrowing In Nigeria

A former Nigerian Bar Association (NBA) president, Dr Olisa Agbakoba, has urged the government to amend section 162(1) of the 1999 Constitution to prevent long-standing fiscal leaks and excessive borrowing.

Agbakoba also called for immediate reforms to ensure the full remittance of all federal revenues and the abolition of the Treasury Single Account (TSA), which he considers unconstitutional.

He also insisted that the government must tackle leakages at their source by transferring all naira revenues into the Federation Account first and ensuring that the funds are managed transparently within an approved budget process, visible to the public.

The senior lawyer made these appeals during a press briefing where he released a policy paper titled: “The Federation Account of Nigeria and Infinite Possibilities. When the framework is put right.” Agbakoba also called for urgent reforms to guarantee the complete remittance of federal revenues and suggested abolishing the Treasury Single Account (TSA), which he views as unconstitutional.

Agbakoba highlighted that section 162(1) states, “The Federation shall maintain a special account called the Federation Account into which all government revenues shall be paid. This is the law. But it is not being followed.”

He referenced former Finance Minister Dr Ngozi Okonjo-Iweala’s establishment of the TSA to consolidate government revenues, calling it a well-meaning reform. However, he pointed out, “TSA is not part of section 162. It was an executive directive, not backed by law, and lacked the constitutional authority that section 162 provides. Leakages persist.

He further explained, “The Constitution lacks a designated custodian for the Federation Account—a critical issue unresolved for 25 years.” Currently, the Central Bank of Nigeria (CBN) serves as fiscal custodian, which conflicts with its monetary functions.

At the same time, the Office of the Accountant-General of the Federation (OAGF) manages the account records.

He added, “Despite increasing federation revenues from N16.8 trillion in 2023 to N31.9 trillion in 2024, the account fails to serve its purpose due to deductions before remittance, uncertain custodianship under Section 162 of the 1999 Constitution, and systemic leakages.”

Agbakoba claimed that over 39% of the projected N14.94 trillion gross revenues for 2025 were diverted before reaching the Federation Account Allocation Committee (FAAC) for distribution among federal, state, and local governments.

He proposed a four-point strategy: first, close the constitutional gap in the Federation Account; second, overhaul the revenue remittance system managed by multiple agencies; third, abolish the TSA as an unconstitutional executive measure; and fourth, empower the President to take corrective actions through executive orders supported by legislation and constitutional amendments.

“This must become a key issue in the 2027 elections. Every presidential candidate must publicly reveal how they plan to resolve the Federation Account crisis.

“Voters are stakeholders in ensuring that revenues collected in their names reach the government’s account and them. The question of the Federation Account is not merely a technical matter but a vital democratic issue,” he stated.