ActionAid Nigeria, one of the leading civil advocacy groups in Nigeria, has called for forensic audit of Nigeria’s revenue management system following indications that more than N34 trillion was deducted from federal gross revenues before the net allocations were distributed to the three tiers of government.
In a statement issued on Thursday, the civil advocacy group noted that the scale of the deductions, representing over 40 per cent of federal revenue in recent years, showed some systemic weaknesses in public financial management and remained risky to the nation’s fiscal stability and development financing.
ActionAid maintained that findings by the World Bank confirmed that a significant portion of government income was being absorbed through pre-distribution charges, including cost-of-collection frameworks and agency remittances, with limited transparency on their composition and utilisation.
The civil advocacy group stated: “These findings reinforce long-standing concerns about Nigeria’s widening fiscal constraints and rising debt burden.
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“The persistence of large-scale revenue leakages represents both a governance failure and a missed opportunity to strengthen fiscal stability”, it added.
ActionAid noted that the deductions, estimated at more than N34 trillion, had been rising based on increasing revenues of the government, leaving the three tiers of government and the FCT with si reduced resources to fund public services.
It warned that the fiscal situation was worsening Nigeria’s reliance on borrowing, citing projections by the International Monetary Fund (IMF) that the nation’s debt-to-GDP ratio could surge to 33.1 per cent by 2027.
According to the group, the widening gap between gross revenue and distributable income is constraining development financing and increasing dependence on debt.
Expressing concern over what it described as “opaque and fragmented” revenue channels, ActionAid noted that substantial portions of national income pass through multiple layers before reaching the Federation Account just as the lack of public disclosure around these deductions, including their justification, structure, and end-use, raises critical accountability questions.
The civil advocacy group also pointed to broader implications for national development, stressing that reduced public revenue is limiting government capacity to invest in essential sectors such as healthcare, education, security, and social protection.
Commenting on the ugly fiscal situation, the Country Director of ActionAid Nigeria, Andrew Mamedu, said the consequences were already being felt by millions of Nigerians due to inadequate funds for their basic needs.
He said: “For citizens grappling with rising inflation, declining purchasing power, and economic hardship, the continued reduction in available public resources means fewer investments in essential services.
Mamedu maintained that weakening fiscal capacity had been exacerbating insecurity, as economic pressures encourage crime, displacement, and social instability, noting that “at a time when livelihoods are becoming more fragile, the erosion of public revenue further limits the government’s ability to respond effectively to these challenges.
“This is not just a fiscal issue; it is a matter of justice. Every naira that fails to reach essential services denies Nigerians access to healthcare, education, and dignity,” he stressed
ActionAid further flawed the lack of transparency surrounding major public expenditures, citing concerns over projects such as the Nigerian Revenue Service (NRS) building, where cost details and procurement processes have not been publicly disclosed.
It stated that citizens had a right to know how public funds are utilized as accountability must extend beyond revenue collection to expenditure, warning that the continued expansion of unchecked deductions poses a direct threat to equitable development, fiscal stability, and public trust.”
To address the fiscal lapses, the civil advocacy group charged the Federal Government to undertake a comprehensive and transparent review of all revenue deduction frameworks with a view to ensuring accountability and efficiency.
Similarly, it demanded the immediate publication of detailed breakdowns of all deductions, strengthened independent oversight of revenue-generating agencies, and reforms to eliminate systemic leakages.
Also, ActionAid tasked the National Assembly to intensify its oversight role through public hearings and scrutiny of deduction structures, while calling on state governments, civil society, and the media to increase pressure for transparency.
Noting that Nigeria’s development trajectory depends not only on revenue generation but on how effectively public resources are managed and deployed, ActionAid maintained that “an independent forensic audit of all deduction mechanisms is critical to restoring public confidence.”
