Key Takeaways
- Monthly federal allocations have risen to over N2 trillion, up from an average of N300 billion in past administrations.
- President Bola Tinubu’s fuel subsidy removal and foreign exchange unification helped drive record revenues, including a N28 trillion disbursement in June 2026.
- Minister Taiwo Oyedele warns that higher allocations alone will not ensure prosperity without investment in productivity, infrastructure, and human capital.
- States and local governments are urged to expand internally generated revenues and strengthen fiscal federalism.
Nigeria’s economic reform agenda is delivering a dramatic fiscal transformation, with monthly federal allocations now exceeding N2 trillion compared with roughly N300 billion in previous administrations. Finance Minister and Coordinating Minister of the Economy, Prof Taiwo Oyedele, revealed this shift on Monday in Owerri while opening the 2026 National Council on Finance and Economic Development retreat.
The three-day retreat, themed “Strengthening Fiscal Federalism for Equity, Sustainable Development and Economic Resilience in a Volatile Global Economy,” brings together key stakeholders to chart a new path for national fiscal policy. Oyedele credited President Bola Tinubu’s bold economic decisions—particularly fuel subsidy removal and foreign exchange unification—for triggering a surge in government revenue.
According to the minister, the reforms culminated in a record N28 trillion disbursement in June 2026. For nearly three decades, many states struggled to pay salaries, but Oyedele noted that no state currently faces such difficulties under the new revenue arrangement.
Revenue Growth Is Not Enough
Despite the encouraging numbers, Oyedele cautioned state governors that higher revenues alone will not guarantee prosperity. He stressed the need for strategic investments in local productivity, infrastructure, human capital, and essential public services.
“Ultimately, the federation cannot share its way into prosperity,” the minister said, urging states to transform into active economic platforms capable of attracting investment, supporting businesses, and creating jobs. He also challenged state and local governments to look beyond monthly oil allocations by aggressively expanding their internally generated revenue bases to withstand volatile global economic pressures.
Call for Fairer Allocation Formulas
Oyedele called for an urgent review of Nigeria’s allocation formulas to ensure equity across all 774 local government areas. He also emphasized the importance of fiscal responsibility and debt sustainability frameworks to safeguard long-term economic stability.
The federal government, he noted, has expanded targeted interventions to cushion the effects of reforms on vulnerable Nigerians. These include cash transfers to 15 million households and the NG-CARES programme, which supports poor and vulnerable communities across the country.
Governors Endorse Fiscal Reforms
In his address, Gov Hope Uzodimma, represented by Deputy Gov Chinyere Ekomaru, praised President Tinubu’s visionary leadership and commitment to fiscal reforms. Uzodimma acknowledged the immense pressure on subnational governments, saying states and local governments bear the direct responsibility of serving the people.
“We face challenges in revenue mobilisation and rising demands from citizens in many critical sectors,” he said. “The solution lies in strengthening fiscal federalism. States must be empowered to generate revenue, allocations must be equitable, and resilience must be built through diversification and prudent management of available resources.”
Permanent Secretary of the Federal Ministry of Finance, Raymond Omachi, said the retreat was designed to generate practical solutions to Nigeria’s fiscal and economic challenges. Participants include the Revenue Mobilisation Allocation and Fiscal Commission, the Office of the Accountant-General of the Federation, state ministries of finance, the Central Bank of Nigeria, and NNPC Ltd.
The forum is expected to produce recommendations on revenue mobilisation, fiscal responsibility, debt sustainability, economic diversification, and improved resource allocation. Participants aim to chart a new fiscal direction anchored on productivity, accountability, equity, and shared responsibility across all three tiers of government.
Why This Matters
Nigeria’s remarkable revenue surge signals a turning point, but the real test lies in how states convert these resources into lasting development. Without deliberate investment in productive capacity and accountable governance, the country risks repeating past cycles of dependency and missed opportunity.