Wale Edun, Nigeria’s Minister of Finance and Co-ordinating Minister of the Economy, has reported a significant increase in the Federation Account’s revenue following the removal of the fuel subsidy. The monthly revenue has risen from an average of N650 billion to over N1 trillion in the past four months.
This revelation came during the opening ceremony of a two-day retreat for the Federal Account Allocation Committee (FAAC), organized in collaboration with the Delta State Government. The statement, issued by Stephen Kilebi, the ministry’s director of press, highlighted the administration’s economic reforms since its inception in May 2023, including the removal of the petroleum subsidy and reforms in fiscal, monetary, and foreign exchange policies.
Okokon Ekanem Udo, the permanent secretary, representing the minister, praised these reforms for their recognition by both local experts and international partners like the IMF and the World Bank. He acknowledged the hardships faced by Nigerians due to the subsidy removal and exchange rate harmonization but assured that the government’s efforts are aimed at economic recovery and inclusive growth.
Monday Onyeme, Deputy Governor of Delta State, commended the FAAC members for their role in enhancing revenue inflows into the Federation Account, benefiting all government tiers. He emphasized the need for further work, particularly regarding the payments of 13% derivation to oil-producing states under the Petroleum Industry Act (PIA).
Onyeme also discussed the Federal Inland Revenue Service’s (FIRS) operations, governed by the FIRS Act 2007 and subsequent Finance Acts. He stressed the importance of economic diversification and the need for policy and institutional frameworks to facilitate this, highlighting agricultural products, manufactured goods, and services as potential non-oil export areas.
Ali Mohammed, the director of home finance, described the retreat as timely, given the economic challenges from over-reliance on oil. He underscored the retreat’s goal to brainstorm ways to diversify Nigeria’s revenue base, focusing on mobilizing domestic revenue, eliminating wasteful spending, and plugging revenue leakages.
He also mentioned the upcoming State Action on Business Enabling Reforms (SABER) initiative, set to run from 2024 to 2026, following the success of the ‘State Fiscal Transparency Accountability and Sustainability’ initiative, which ends in December 2023. This initiative, pending the National Assembly’s approval of an abridged external borrowing plan, aims to continue supporting state governments in improving business environments and revenue generation.