Oyedele Urges States to Reduce Reliance on Federal Allocations, Boost Internal Revenue

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has called on state governments to strengthen their Internally-Generated Revenue and reduce dependence on monthly allocations from the Federation Account.

Speaking on Wednesday at the 2026 National Council on Finance and Economic Development Retreat in Owerri, Imo State, Oyedele emphasized that Nigeria must transition from an allocation-dependent economy to one driven by production, investment, and job creation.

The minister, who spoke on the theme ‘Strengthening Fiscal Federalism for Equity, Sustainable Development and Economic Resilience in a Volatile Global Economy,’ stressed the need for greater fiscal responsibility, accountability, and cooperation among the three tiers of government.

Oyedele noted that recent economic reforms, including the removal of fuel subsidy and unification of the foreign exchange market, have significantly boosted revenues distributed through the Federation Account. Monthly allocations, which averaged between N300 billion and N600 billion before 2023, now exceed N2 trillion, with the Federation Account Allocation Committee distributing N2.8 trillion to all government levels in June 2026.

However, he cautioned that higher allocations alone would not guarantee development, insisting that increased revenues must translate into improved infrastructure, human capital development, and public services.

The minister urged state governments nationwide to attract investments, create jobs, and strengthen their IGR rather than rely heavily on federal allocations. He also advocated prudent borrowing and greater transparency in public finance, warning against accumulating liabilities without credible repayment plans.

Imo State Governor Hope Uzodimma, represented by his Deputy Chinyere Ekomaru, echoed the minister’s sentiments, stating that continued dependence on oil revenue was no longer sustainable. He highlighted his administration’s efforts to digitize revenue collection, block leakages, and increase IGR through investments in agriculture, the digital economy, tourism, power, education, and infrastructure.

The retreat also featured the Chairman of the Revenue Mobilization, Allocation and Fiscal Commission, Dr Mohammed Shehu; the Accountant-General of the Federation, Dr Shamsudeen Ogunjimi; the Executive Chairman of the Nigeria Revenue Service, Dr Zacch Adedeji; and other key stakeholders.

The Permanent Secretary, Special Duties at the Federal Ministry of Finance, Mohammed Sanusi, described the retreat as timely, coming at a critical period when Nigeria is implementing major economic reforms to strengthen macroeconomic stability and promote sustainable development.