President Bola Tinubu has directed the Ministry of Finance to reassess all deductions and revenue retention arrangements by major revenue-generating agencies as part of efforts to free up funds for investment and accelerate economic growth.
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, disclosed this on Wednesday while briefing journalists after the Federal Executive Council (FEC) meeting presided over by the president in Abuja.
The review will 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 (NNPC) Limited.
Currently, the FIRS retains 4% of all non-oil revenues, while the NUPRC takes 4% of royalties, rents, and other oil and gas earnings. The NCS keeps 7% of revenue from duties and levies—funding models collectively referred to as the “cost of collection.” Under the Petroleum Industry Act (PIA), the NNPC has also been deducting 60% of oil and gas profits from production sharing contracts, split equally between a 30% management fee and a 30% frontier exploration fund.
Tinubu has specifically ordered a reassessment of the NNPC’s 30% management fee and 30% frontier exploration deductions to “optimise public savings, improve spending efficiency, and release more resources for growth.”
According to Edun, the president commended the agencies for implementing reforms that have dismantled economic distortions, restored policy credibility, and boosted investor confidence—positioning Nigeria to attract greater domestic and foreign investment in sectors such as infrastructure, oil and gas, health, and manufacturing.
Reaffirming his administration’s target of building a \$1 trillion economy by 2030, Tinubu stressed the need for sustained annual economic growth of at least 7% from 2027. He described this goal as both an economic necessity and a moral obligation to address poverty sustainably.
The president also referenced the July 2025 IMF Article IV report, which he said affirms Nigeria’s economic trajectory and the importance of investment-led growth. He drew attention to the “Renewed Hope Ward Development Programme”, a grassroots poverty-reduction initiative covering all 8,809 wards nationwide, designed to empower economically active citizens in partnership with state governments and the private sector.
Tinubu emphasised that public investment currently accounts for just 5% of GDP—held back by low public savings—underscoring the need to “maximise every available naira” amid global liquidity constraints. He directed the economic management team, led by Edun, to present actionable recommendations to the FEC on reviewing all federation account deductions, including collection costs and related charges.
Edun noted that macroeconomic indicators are improving, with a stabilising exchange rate, easing inflation, rising revenues, and a debt-to-GDP ratio within acceptable limits. He added that Nigeria is increasingly viewed as a prime investment destination, supported by a competitive exchange rate, and stressed that higher public sector savings will be critical to boosting investment.
In 2024, the federal government mandated an automatic 50% remittance of total revenue from all self-funded enterprises. Before this, such agencies could spend up to half their revenue, retaining 20% of the remainder as operating surplus.
