Nigeria loses N20trn yearly over revenue leakages – Agbakoba

LAGOS — Nigeria is losing as much as N20 trillion in revenue annually due to the failure to fully comply with constitutional provisions mandating remittances into the Federation Account, a former President of the Nigerian Bar Association, Dr Olisa Agbakoba (SAN), has said.

Agbakoba disclosed this on Wednesday in Lagos at a high-level news conference where he warned that the country’s fiscal crisis is largely driven by systemic leakages and weak enforcement of existing laws, rather than lack of resources.

Citing Section 162(1) of the Constitution, he stressed that all revenues collected by the Federal Government are required to be paid into the Federation Account before any deductions or disbursement, a provision he said has been consistently breached.

According to him, current estimates indicate that up to N20 trillion in revenues that should accrue to the Federation Account never get there, as deductions are made at source or funds are diverted through alternative arrangements.

He argued that strict compliance with the constitutional provision could unlock between N15 trillion and N20 trillion annually for distribution among the three tiers of government.

Agbakoba, who is the Senior Partner at Olisa Agbakoba Legal (OAL) Centre for Petroleum Governance, Regulatory and Policy Advisory Practice, called for urgent constitutional reforms to eliminate loopholes and enforce transparency.

He proposed that all revenues accruing to the Federation must be paid into the Federation Account in gross, without any deductions for costs, charges, or offsets, while all expenses related to revenue generation should only be made after remittance and subject to appropriation by the National Assembly.

He further insisted that no executive directive, administrative policy, or government instrument should be allowed to create or operate any account parallel to the Federation Account.

“If this framework is enforced, it will shut down leakages at source. Every naira earned by the Federal Government will first enter the Federation Account before any spending occurs,” he said.

Agbakoba noted that the current system has significantly worsened Nigeria’s debt burden, as huge portions of federal revenue are used to service debts that could have been avoided if revenues were properly accounted for.

He warned that continued failure to address the issue would further constrain funding for critical infrastructure, including roads, healthcare, and education.

“The revenues to fund government operations are already there. They are simply not getting to where the Constitution says they should be,” he said.

He added that reducing revenue leakages would not only ease the country’s debt pressure but also stimulate economic growth, improve service delivery by states, and enhance the overall welfare of citizens.

Agbakoba maintained that Nigeria’s challenge is not revenue generation but the absence of a transparent and enforceable system that ensures full remittance of what is already earned into the Federation Account.