Olisa Agbakoba, a former president of the Nigerian Bar Association, has sounded the alarm over what he views as a serious financial crisis facing Nigeria’s Federation Account. He asserts that substantial revenue deductions and under-remittances are undermining the nation’s economic health.
In a statement on X, Agbakoba highlighted that many citizens do not fully grasp the role of the Federation Account, which was established under Section 162 of the 1999 Constitution to pool and redistribute revenues across federal, state, and local governments. He described the account as the country’s financial core, now threatened by revenue leaks and escalating debt.
According to Agbakoba, key indicators reveal the depth of the problem. In 2025, a massive N14.94 trillion—nearly 40% of total federation revenues—was diverted before reaching the account. The Nigerian National Petroleum Company Limited (NNPCL) withheld N500 billion out of the N1.1 trillion due in 2024. A current FAAC investigation is probing allegations of $42.37 billion in under-remittances from 2011 to 2017. Last year, debt service consumed 69% of federal revenue, far exceeding the IMF’s recommended 30-40% threshold. Nigeria’s total public debt now stands at N159.27 trillion.
Agbakoba characterized this as borrowing against funds already generated but not reaching the Federation Account. To address the crisis, he has proposed a policy reform aimed at strengthening Executive Order 9, which he intends to submit to President Bola Tinubu. He called for a national conversation on restoring the financial heartbeat of the federation.