President Bola Tinubu has ordered a comprehensive review of all deductions and revenue retention practices by major revenue-generating agencies.
These agencies include the Federal Inland Revenue Service (FIRS), Nigeria Customs Service, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Maritime Administration and Safety Agency (NIMASA), and the Nigerian National Petroleum Company Limited (NNPC).
The directive, given at the Federal Executive Council (FEC) meeting on Wednesday in Abuja, aims to optimise public savings, enhance spending efficiency, and free up more resources to finance growth.
The President specifically called for a reassessment of NNPC’s 30 per cent management fee and 30 per cent frontier exploration deduction provided under the Petroleum Industry Act.
In his remarks to Council members, Tinubu expressed appreciation for their commitment and hard work in implementing bold and difficult reforms that have dismantled longstanding economic distortions, restored policy credibility, enhanced resilience, and bolstered investor confidence.
He said these reforms had created a transparent, competitive business environment that has positioned Nigeria to attract more domestic and foreign investment in critical sectors such as infrastructure, oil and gas, health, and manufactured exports.
Reaffirming his administration’s Renewed Hope Agenda, Tinubu said the target remains to build a $1 trillion economy by 2030, and that to achieve this, the economy must grow by at least 7% annually from 2027.
He described the growth target as “not just an economic target but a moral imperative,” noting that higher growth is the only sustainable path to tackling poverty.
He also cited the July 2025 IMF Article IV report, which he said affirms Nigeria’s economic trajectory and underlines the importance of investment-led growth.
The President highlighted the launch of the Renewed Hope Ward Development Programme, a ward-based initiative covering all 8,809 political wards across Nigeria’s 774 local government areas.
The programme is designed to empower economically active individuals at the grassroots through a micro-level poverty reduction approach.
Tinubu said the initiative would involve subnational governments and private sector partners to ensure efficient and impactful implementation.
He added that during the last National Economic Council meeting, he urged governors to prioritise productivity-enhancing investments, strengthen food security, and deepen collaboration with local governments to accelerate growth and ensure no Nigerian is left behind.
Tinubu emphasised that public investment currently accounts for only 5% of GDP due to low public savings.
He said optimising every available naira was critical to sustaining momentum and financing growth, especially during global liquidity constraints.
Accordingly, he directed the Economic Management Team, chaired by the minister of finance and coordinating minister of the economy, Wale Edun, to review all deductions from the Federation Account, including the cost of collection by FIRS, Customs, NUPRC, and NIMASA, as well as NNPC’s charges.
The team is to present actionable recommendations to the FEC for the optimal way forward.
After the meeting, Edun said macroeconomic stability indicators are improving, with exchange rates stabilising, inflation coming down, revenues rising, and debt-to-GDP ratios coming within range.
He added that Nigeria is now seen as an attractive investment destination across multiple sectors, aided by a competitive exchange rate.
Edun reiterated that savings are the foundation for investment, whether from domestic sources or foreign inflows, and that the President’s charge is urgently raising public sector savings.
This will involve reviewing deductions and revenue retention practices to make more funds available for investment.
He said the President commended FEC members for their resilience and support in implementing the reform agenda.
Edun disclosed that he also presented two memos: one for $125 million in Islamic Development Bank financing for infrastructure in Abia State, covering about 35 kilometres of roads in Umuahia and 126 kilometres in Aba; and another on refinancing ₦4 trillion in outstanding electricity sector obligations.
According to him, the electricity sector debt resolution will be implemented in phases under the expert management of the Debt Management Office and other relevant agencies. The first phase is expected to be completed within three to four weeks.
Policy, a welcome development – Teriba
The chief executive of Economic Associates, Dr. Ayo Teriba, said this debate, in which the so-called revenue –generating agencies determine what they want to fund before they decide what to remit to the government, including the Central Bank of Nigeria which embarked on projects that run into billions of Naira, has been on the table for a long time.
He said if all these agencies must satisfy their capital and recurrent projects before remitting to the federal government, then the federal government will remain forever poor, as they may not even have enough to fund the capital projects of those agencies.
“If President Tinubu wants to give the agencies fiscal rules and limit their margin of discretion, what fraction of the revenues collected they can decide to use and what fraction they can choose to remit will be a welcome development.
“We have been calling for this from before the Buhari days, although it seemed like those agencies were influential enough to perpetuate that practice in spite of the Treasury Single Account (TSA) reforms that were done. So we had revenue-collecting agencies that are comfortable, while the federal government is not comfortable revenue-wise.
“I don’t know anywhere else in the world where government agencies have the leeway to forge their own capital operations. Capital projects should be centralised; it should be something based on the exclusive preserve of the Executive and the National Assembly, that all revenues they collect must be remitted to decide what to do with it.
“I think it’s a welcome development; the president should be encouraged to bring more rules in this regard rather than discretion; the federal government will be fatter if it moves in this direction,” he said.
Bureaucracy should not delay operations – Yusuf
On its part, the chief executive of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, commended the policy, which he said would help boost the government’s revenue drive.
He, however, cautioned the government to ensure bureaucracy does not hinder the smooth running of the agencies, a situation, he said, would make the policy counterproductive.
“The policy is in line with the tax and fiscal reforms that the government has put in place. If you look at the Taiwo Committee report and all the recommendations made, I believe what we are seeing now is part of the implementation of those reforms.
“One of the major objectives of the reform is to boost government revenue and ensure that all revenues from all agencies come directly to the government. That way, when the government is preparing the budget, it will have adequate funds rather than being constrained by low account balances.
“This is what is called fiscal consolidation, in other words, boosting government revenue to reduce the deficit and the burden of debt. Essentially, the idea is to ensure that all those agencies with significant funds contribute to a common pool to finance government operations.
“To that extent, it is not a bad idea. However, the only challenge is that it must be implemented in a way that does not cripple the operations of those agencies. If they are no longer allowed to retain part of their funds, they will have to go through a bureaucratic process of requesting money to fund their operations.”
