President Bola Tinubu has directed the Federal Ministry of Finance to conduct a comprehensive review of deductions and revenue retention practices by key revenue-generating agencies with a view to enhancing public finance efficiency for the nation’s sustainable economic growth.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, who told State House correspondents about the President’s directive after the Federal Executive Council (FEC) Meeting on Wednesday, said that the review would cover the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Maritime Administration and Safety Agency (NIMASA), and the Nigerian National Petroleum Company Limited (NNPCL).
According to him, the review seeks to reassess the current funding model, known as the cost of collection, where FIRS receives 4% of all non-oil revenues, NUPRC gets 4% of royalties, rents, and other revenues from the oil and gas sector, NCS retains 7% of revenue from duties and levies as well as NNPC’s 30% management fee and 30% frontier exploration deduction under the Petroleum Industry Act (PIA).
The minister clarified: “President Tinubu’s directive is part of efforts to sustain reforms that have dismantled economic distortions, restored policy credibility, enhanced resilience, and bolstered investor confidence.
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“The President reaffirmed his administration’s target of building a $1 trillion economy by 2030, which requires at least 7% annual economic growth from 2027”, he added.
Describing this goal as not just an economic target but a moral imperative”, Edun maintained that improved performance of the economy, particularly a more efficient fiscal system, remained essential to sustainably tackling poverty level in the country.
He expatiated: “The President also highlighted the importance of maximizing every available naira to sustain momentum amid global liquidity constraints, noting that public investment currently accounts for only 5% of GDP due to low public savings.
“Nigeria is now viewed as an attractive investment destination across multiple sectors, supported by a competitive exchange rate, savings form the foundation for investment, whether from domestic sources or foreign inflows, and the President’s directive aims to urgently increase public sector savings.
“The President also drew attention to the Renewed Hope Ward Development Programme, a grassroots poverty-reduction initiative covering all 8,809 wards across the country. The scheme aims to empower economically active individuals through partnerships with state governments and the private sector,” Edun added.
The minister explained further that Nigeria’s macroeconomic indicators were improving, with a stabilizing exchange rate, declining inflation, rising revenues, and debt-to-GDP ratios within target levels.
Earlier at the FEC meeting, he had presented two memoranda to the Council, including a $125 million Islamic Development Bank financing for infrastructure in Abia State and a plan to refinance N4 trillion in outstanding electricity sector obligations for approval.
