
News
$418m deductions suspended as FG, states meet for FAAC today


There were strong indications on Wednesday that the federal and state governments had agreed to the suspension of the deduction of $418m Paris Club refunds from states and local governments’ accounts pending the determination of court cases on the issue.
Following the agreement, which was reached between states’ officials and the Federal Ministry of Finance, the Federation Account Allocation Committee meeting, which ended in a deadlock last Friday, would now hold today (Thursday).
It was, however, not clear if the decision to suspend the deductions would affect the October revenue allocation, but it was gathered that the Federal Government had already issued promissory notes on the consultants’ pay.
The Ekiti State Commissioner for Finance, Akin Oyebode, confirmed in an interview with The PUNCH that the issue of deductions had been resolved.
The commissioner, who did not give details of the resolution, also confirmed that the FAAC would either meet on Wednesday or Thursday (today).
He also reiterated the demand of the states for the separation of the Office of the Accountant-General of the Federation from the Office of the Accountant-General of the Federal Government.
Last Friday’ FAAC meeting ended in a deadlock as a disagreement arose between the federal and state governments when the committee was informed by the Ministry of Finance that the deductions for the $418m from the local governments’ allocation had commenced in order to pay the consultants for the work they did on the Paris Club refund.
The country had in 2006 paid $12bn to get a $18bn debt write-off by the Paris Club of international creditors.
States and local governments that did not owe the Paris Club later asked for a refund when they realised that the payment was made directly from the revenue accruing to the entire federation.
There were reports that some consultants, who claimed a percentage of the refunds as payment for services they said they rendered to the states and local governments, went to court to demand their pay.
The Federal Government had negotiated an out-of-court settlement with the contractors and $418m was agreed on as the judgment debt.
But the Nigeria Governors’ Forum, which opposed the payment, approached the court to stop the implementation of the controversial agreement.
The Chairman of the Forum of Commissioners of Finance and Benue State Commissioner for Finance, David Olofu, had said on Monday that the sharing of the October revenue by the three tiers of government was suspended last Friday because of the deductions.
A top member of FAAC, who confided in The PUNCH on Wednesday, said, “Deductions will not be done until the conclusion of the court cases, but I don’t know what will happen to the October allocation on which deductions had been made.”
Oyebode also told one of our correspondents on Wednesday that the issue of deductions, which led to the delay in the monthly allocation to states from the Federation Account, had been resolved.
The Ekiti finance commissioner said, “The issue has been resolved. We (Federation Account Allocation Committee) expect to meet today (Wednesday) to adopt the communiqué. I believe that the meeting will hold today or latest tomorrow (Thursday).”
Oyebode, who declined comments on the content of the communiqué, said the allocation for October would be released.
He stated, “It (allocation) will be released. It was not withheld. The issue had to do with deductions, which were made on the accounts of the states and local governments. Our position, which has been clearly stated by the Chairman of the Forum of Finance Commissioners, is that we believe that those deductions are being challenged and should not even start unless the claims are verified.
“Also, if we are a federation and we are equal partners, we don’t believe that we should just come to a meeting and see deductions on our statement that were not previously discussed and agreed on. That is the principle of federation that we are upholding and defending. It is not an argument per se. It is just that it is a principle that the federating units should be upheld at all times.”
He added that an issue of concern was the need to have separate accountants-general for the federation and the Federal Government, noting, “The Office of the Accountant-General of the Federation is not the same as the Office of the Accountant-General of the Federal Government.
“We have argued that the offices should be separated. There should be an accountant-general for the Federal Government and an accountant-general for the federation, and not the present situation where the accountant-general of the federation is only responsible to the Minister of Finance.”
The commissioner gave an assurance that Ekiti State would pay October salaries to workers as scheduled, saying, “We will pay salaries. What is important is paying salaries.”
FG has seen reason why deductions can’t start now – Delta commissioner
The Delta State Commissioner for Finance, Mr Fidelis Tilije, stated in an interview with The PUNCH on Wednesday that the Federal Government had agreed that the deductions could not start now.
He said, “The Federal Government has seen reason why deductions cannot start now. For crying out loud, there are court processes that are ongoing. Why don’t we wait till the court processes are concluded before talking about deductions?
“The Federal Government has issued promissory notes. The judgment they are talking about is a high court judgment.”
Tilije allayed fears over the non-payment of October salaries by Delta State, saying, “We will manage, but we hope that whatever problem we have will be resolved this week.
“We are supposed to have a conclusive discussion today (Wednesday), but we are still waiting for the Federal Ministry of Finance to determine the time of the meeting. If we don’t hold the meeting today (Wednesday), we will hopefully hold it tomorrow (Thursday).”
The Osun State Commissioner for Finance, Bola Oyebamiji, told one of our correspondents that the state would not borrow to pay salaries.
He said the government would strategise and find a way round the issue to ensure that workers would not suffer.
“We are going to think outside the box as we normally do. We are not going to borrow, but we are going to find a way round the situation. We will strategise and see what we can do to ensure that our people do not suffer,” Oyebamiji stated.
Efforts made to get a response from the spokesperson for the Office of the Accountant-General of the Federation, Henshaw Ogubike, were unsuccessful as calls were not taken and messages delivered were not replied.
PUNCH
News
Chief Imam 81 Division charges Nigerians to emulate peaceful life-style of Prophet Muhammad

The Chief Imam of 81 Division of the Nigerian Army, Lt.-Col. Husein Eleje, has charged Nigerians emulate and imbibe Prophet Muhammad’s peaceful, truthful and just lifestyle in order to build a progressive nation.
Eleje gave the charge in an interview on Tuesday from Abakaliki, Ebonyi State to commemorate Eid-el-Maulud celebration being the celebration of the birth of the Holy Prophet Muhammad (may Allah’s peace be upon Him).
He said that Muhammad, who was born at Middle-East in Saudi Arabia in the year 570 AD, displayed worthy character among all people and was known as “a trustworthy, honest and simple person”.
According to him, so the celebration of the Maulud is done to emulate the good life-style, which Prophet Muhammad lived.
“The Holy Prophet lived peaceful and humble life and always mediate among disputing parties. He never cheated anyone nor shy away from speaking the truth.
“Prophet Muhammad associated freely, traded, worked together with the common people to establish a city (Medina) where people of different faiths lived together and practiced their faith and had freedom of worship.
“He stood against any oppression and injustice and he always say ‘your bloods are sacred, and your wealth and property are sacred’.
“To Him, it is prohibited for any one to harm his brother or take his property unjustly,” he said.
The cleric urged Nigerians to tolerate one another and protect the interest of one another as the Prophet had exemplified.
Eleje said that the Prophet humbled Himself to even those who followed and accept Islam as well as participated equally with them in any communal work to build the society.
“We must be a people who advocate for peaceful co-existence among others and our neighbours,” he added.
News
Why Restoring Subsidy Would Set Nigeria Back – Former Abia Speaker Chinedum Orji Backs Tinubu


When Alhaji Atiku Abubakar recently said he would restore petroleum subsidy if elected president, he tapped into a familiar frustration. Fuel prices are high, transport costs bite, and households are feeling the squeeze. That pain is real. But the promise to bring back the old subsidy regime is not relief. It is a return to a policy that bled the treasury, starved the states, and kept Nigeria dependent on borrowing to buy fuel.
For decades the subsidy was sold as a welfare program for the poor. In practice it became the most expensive welfare program for smugglers, marketers, and a handful of importers. The Nigerian National Petroleum Company would claim billions monthly, and no one could audit where the product actually went. That was not social protection. That was fiscal leakage at scale.
The first and most immediate benefit of subsidy removal is fiscal breathing room. In 2022 alone, subsidy gulped over 4 trillion naira. That was more than we spent on education, health, and capital projects combined. When that money stopped going to fuel, it did not disappear. It stayed in government coffers, and a large share of it flows directly to the sub nationals through FAAC.
The sub nationals are where the difference is being felt most. States and local governments now receive significantly higher monthly allocations. Governors in Rivers, Lagos, Kano, and others have reported FAAC receipts nearly doubling compared to pre-removal levels. That is money that can pay teachers, fix primary health centers, and clear pension arrears without waiting for Abuja bailouts.
In Rivers State, for example, the additional resources have allowed the state government to accelerate road projects, expand the school feeding conversation, and invest in water and sanitation. Across the country, states are using the windfall to clear salary backlogs and to fund security. That is the direct link between subsidy removal and better services at your doorstep.
Beyond recurrent needs, the removal unlocked capital spending. With subsidy gone, the federal government and states are no longer borrowing just to keep petrol cheap. Instead, we are seeing commitments to CNG buses, mass transit, student loans, and conditional cash transfers. These are targeted interventions. They reach the vulnerable without subsidizing a businessman in Cotonou who drives across the border to buy cheap fuel.
One of the quietest but biggest wins is the end of the subsidy-driven smuggling economy. When Nigerian petrol was artificially cheap, an estimated 30 to 40 percent was leaving our borders daily. That drained our forex and rewarded criminal networks. With prices aligned to market, the incentive to smuggle collapsed almost overnight. That saves dollars and restores integrity to our supply chain.
Sub nationals also gained policy space. Before, states were trapped. They could not raise IGR fast enough to match their responsibilities because the center was spending all its revenue on fuel. Now, with more money coming from FAAC and with subsidy no longer a federal albatross, states can plan medium-term budgets. They can borrow for infrastructure knowing their revenue base is real, not propped up by a phantom fuel bill.
The macroeconomic case is just as strong. Subsidy removal freed up foreign exchange that was being used to import and “subsidize” fuel. That pressure contributed to naira volatility. With the drain gone, the CBN has more room to stabilize the market, and investors see a government willing to make hard choices. Confidence matters for FDI, and FDI builds factories, not just fuel stations.
Let us be honest about the counterargument. Atiku and others argue that Nigerians cannot afford the current prices and that government should cushion the pain by restoring subsidy. The compassion is understandable. But the method is wrong. A blanket subsidy is the bluntest tool possible. It subsidizes the rich who own three cars, it subsidizes generators in malls, and it subsidizes our neighbors.
Targeted support is both cheaper and fairer. The savings from subsidy removal are already funding student loans, nano-grants, and public transport reforms. Those programs can be scaled. If we put 1 trillion naira directly into transport, health insurance, and food support, the impact on the poor will be ten times what the same 1 trillion did when spread thinly across every liter of petrol.
International experience backs this. Indonesia, India, and Ghana all removed fuel subsidies and redirected the savings to health, education, and cash transfers. In each case there was short-term pain, followed by stronger public services. Countries that reversed course and brought subsidies back, like Egypt in 2014 before its second reform, ended up in deeper debt crises.
Restoring subsidy now would also reverse private sector investment. Since the removal, private companies have begun investing in refineries, CNG conversion centers, and logistics. Dangote Refinery, modular refineries, and gas infrastructure are viable only because prices reflect costs. If we announce that subsidy will return, those investors pause. That means fewer jobs in Port Harcourt, Warri, and Lagos.
For the sub nationals, a return to subsidy is a direct pay cut. FAAC would shrink again. States would go back to borrowing to pay salaries. Projects started with the new revenues would stall. Local governments, which depend almost entirely on federal transfers, would be the first to feel it. That is not theoretical. We lived it for 20 years.
Atiku’s argument rests on the idea that the timing was wrong and the palliatives were insufficient. Fair critique. But the solution to poor implementation is better implementation, not abandoning the reform. We should demand faster rollout of CNG buses, more transparency in how FAAC windfalls are spent, and stronger monitoring of state budgets. We should not demand a return to the policy that caused the weakness.
The subsidy was also a corruption magnet. It created a system where claims were king and verification was optional. Removing it broke that cycle. Bringing it back without fixing the governance structure is inviting the same fraud, only now with higher global oil prices and a weaker naira.
There is also a climate and energy angle. Cheap petrol discouraged gas adoption and kept us locked into generators. With market pricing, CNG, electric tricycles, and solar become economically sensible. States can lead this transition because they now have the funds to subsidize conversion kits, not fuel itself.
Politically, the promise to restore subsidy sounds popular in the short term. But governance is about trade-offs. The trade-off here is clear: cheap fuel for a few months versus hospitals, roads, and jobs for years. Sub nationals have already shown what they can do with the extra money. To take it away is to punish the very level of government closest to the people.
Finally, debt. Subsidy was financed largely by borrowing and by unpaid arrears to NNPC. That debt was crowding out everything else. Every naira we do not spend on subsidy is a naira we do not have to borrow. That lowers interest payments, which in turn frees more money for states and local governments.
Nigeria does not need a return to the past. We need to finish the work of this reform. That means plugging leakages, auditing state spending, and scaling targeted support so no family is left behind.
Alhaji Atiku is a respected Nigerian, but on this point he is wrong. Restoring subsidy would undo the single most important fiscal correction we have made in a generation. It would hurt the states, weaken the naira, and put us back on the borrowing treadmill.
The better path is forward. Keep the subsidy gone. Let the sub nationals keep the resources. And let government prove that the savings can translate into tangible relief. That is how we turn pain into progress, and that is how we build a Nigeria that works beyond election cycles.
CHINEDUM ENYINNAYA ORJI writes from Amaokwe Ugba, Umuahia Ibeku and the All Progressives Congress Candidate for Ikwuano Umuahia Federal Constituency.
News
Seven Killed, Seven Injured In Bida-Kutigi Road Crash

Seven people have died and seven others sustained injuries in a fatal road crash on the Bida-Kutigi road in Niger State, the Federal Road Safety Corps (FRSC) has confirmed.
The FRSC Niger Sector Commander, Corps Commander Aishatu Sa’adu, confirmed the incident to the News Agency of Nigeria (NAN) on Sunday.
Sa’adu said the crash occurred on Sunday afternoon at Shebe village, a few kilometres from Kutigi town.
According to her, the accident involved a Mazda vehicle and a Siena bus travelling along the Bida-Kutigi road.
“Seven people lost their lives, seven others were injured while four were rescued without injuries, bringing the total involved to 18,” she said.
The sector commander said the seven victims who died were confirmed dead at the scene, while the injured victims sustained injuries of varying degrees.
She said the injured were evacuated to Kutigi General Hospital for medical attention, while the remains of the deceased were deposited at the hospital’s mortuary.
The FRSC official did not immediately disclose the identities of the victims or provide further details on the circumstances surrounding the collision.
The crash involved a total of 18 people, comprising seven fatalities, seven injured persons and four uninjured survivors.
Authorities are expected to investigate the cause of the accident and determine the circumstances that led to the fatal collision.
News
Donald Duke: Nigeria Is One of Africa’s Poorest Countries

The presidential candidate of the People’s Redemption Party (PRP), Donald Duke, has described as a “lie” the claim that Nigeria is Africa’s wealthiest country, arguing that the country remains one of the poorest on the continent when measured by per capita income.
Duke, a former governor of Cross River State, stated this during an interview with journalists in Lagos.
He said Nigeria’s position as Africa’s largest economy by Gross Domestic Product (GDP) did not necessarily reflect the living standards of its citizens.
“It is embarrassing that a country that was considered one of the wealthiest in Africa still thinks today that it is the largest economy in Africa. That is not true.
“We are living a lie. It is a nice sound bite, though, to say that Nigeria is the largest economy in Africa. No. Nigeria is just one of the poorest when you take per capita income into consideration,” he said.
Duke said productivity remained critical to economic development, noting that several countries Nigerians considered smaller had higher per capita incomes.
On insecurity, the PRP presidential candidate said he preferred not to describe terrorists operating in Nigeria as “Islamic terrorists”, arguing that their activities were not driven by Islam.
He attributed part of the security challenges, particularly in Northern Nigeria, to the collapse of Libya, which he said contributed to the movement of arms into Nigeria through its land borders.
Duke said the government needed short-, medium- and long-term measures to tackle kidnapping, banditry and terrorism.
“Right now, you have got to deal with the security problems as they exist today — kidnapping, banditry, terrorism and all that.
“But even beyond that, those things are consequences of other things. They are consequences of a very poor economy and, of course, the failure to properly manage our borders,” he said.
He also called for measures to improve citizens’ productivity through increased local production and the use of modern technology to strengthen border security.
On the economic development of Northern Nigeria, Duke said that, if elected president, he would restructure mining activities in the region to ensure that local and state governments, as well as host communities, benefited from the sector.
He said the region’s mineral deposits, rather than oil in the Chad Basin, represented a major economic opportunity.
“There must be a structured way of mining. Today, it is artisanal, and the broader community, the border communities, society and the nation itself do not adequately benefit from those resources,” Duke said.
He cited gold deposits in Zamfara State as an example, saying insecurity had affected mining activities in the area.
Duke proposed that each state should be treated as an economic entity, with the Federal Government working with state governments to assess mineral deposits and establish proven reserves capable of attracting investors.
He said mining development should involve a partnership between the Federal and state governments, with revenues shared between both levels of government.
However, Duke stressed that security remained essential to attracting investment into the mining sector.
“Nobody is going to invest if there is no security,” he said, citing the experience of the Niger Delta, where insecurity had contributed to oil companies moving their operations to offshore locations.
News
FAAC bonanza: Govs face questions as payouts hit N47tn

This scrutiny follows the revelation that the Federation Account disbursed about N47tn to the three tiers of government in the three years since the removal of petrol subsidy.
This was as the Federal Government, 36 states and 774 local governments shared a cumulative N93.216tn as revenue from the Federation Account between 2017 and 2025, with more than half of the amount distributed in the three years following the economic reforms introduced by the Federal Government in 2023.
These figures were disclosed in a document obtained by our correspondent from the Federal Ministry of Finance on Sunday.
It showed that N47.25tn, representing about 50.7 per cent of the N93.13tn shared during the period, was distributed between 2023 and 2025 alone, highlighting the sharp expansion in revenues following the removal of petrol subsidy, exchange rate reforms and increased revenue mobilisation.
But policy analysts, civil society groups and other critics say the increase in revenue has not translated into a corresponding improvement in the living conditions of Nigerians facing rising living costs, unemployment, poverty and inadequate public services.
In an interview, a policy analyst, Adebayo Abubakar, said the removal of subsidy had increased government revenues but argued that the additional funds had not always translated into spending that reflected the economic hardship facing Nigerians.
“Roads, bridges, drainage and other infrastructure remain important, but some governments appear to favour conspicuous projects while schools, healthcare facilities, water supply and other basic services receive inadequate attention,” he said.
The removal of petrol subsidy and other economic reforms introduced by the Federal Government in 2023 have triggered an unprecedented surge in revenue flowing into the Federation Account, with the 36 states and 774 local government areas receiving significantly higher allocations amid growing questions over how the windfall has translated into improved infrastructure, security and public services.
The sharp increase in Federation Account Allocation Committee payouts has, however, placed state governors under renewed scrutiny, as many Nigerians continue to grapple with high living costs, poor infrastructure and worsening insecurity despite the substantial growth in revenues available to subnational governments.
While some governors have linked higher FAAC receipts to road construction, bridges, healthcare, education, workers’ welfare and other projects, residents in some states said the increased revenue had not resulted in improved public services or reduced economic hardship.
Findings by The PUNCH showed that the Federal Government, states and local governments received about N47tn from the Federation Account in the three years following the reforms, exceeding the amount shared in the preceding six-year period and reigniting the debate over the benefits and consequences of the subsidy removal policy.
FAAC disbursements
The document showed that FAAC distributions rose from N5.64tn in 2017 to N21.90tn in 2025, representing an increase of about 288 per cent over the nine-year period.
Year-by-year, net FAAC stood at N5.64tn in 2017, N7.98tn in 2018, N7.85tn in 2019, N7.11tn in 2020, N8.12tn in 2021 and N9.18tn in 2022. It subsequently rose to N10.09tn in 2023, N15.26tn in 2024 and a record N21.90tn in 2025.
The development highlights the dramatic transformation in Nigeria’s federation revenue following the removal of petrol subsidy, reforms in the foreign exchange market and efforts to improve revenue mobilisation.
It also exposes the limits of measuring Nigeria’s revenue growth in naira terms alone. While the removal of petrol subsidy, foreign exchange reforms and improved revenue mobilisation helped to push FAAC allocations sharply higher, a significant part of the increase reflects the devaluation of the naira.
For instance, Nigeria shared N7.98tn through FAAC in 2018, which, at the Central Bank of Nigeria exchange rate at the time, was equivalent to about $26bn. By 2025, the amount shared had risen almost threefold to N21.9tn. However, when converted at the CBN exchange rate for 2025, the allocation was worth only about $14.4bn.
In other words, while FAAC distribution increased by about 174 per cent in naira terms between 2018 and 2025, its dollar value fell by roughly 45 per cent, or about $11.6bn.
The comparison suggests that the apparent surge in federation revenue was driven not only by increased revenue generation and reforms, but also by the weaker naira, which translated dollar-denominated oil and other foreign currency earnings into substantially larger amounts of naira.
The document showed that net FAAC allocations stood at N5.64tn in 2017 and rose to N7.98tn in 2018, representing a 29 per cent increase. However, growth was not sustained in the following two years.
The distributable revenue fell by two per cent to N7.85tn in 2019. It declined further by 10 per cent to N7.11tn in 2020, reflecting the economic disruptions associated with the COVID-19 pandemic and developments in the oil market.
The distributable revenue, however, recovered to N8.12tn in 2021 and increased to N9.18tn in 2022. The document put the average annual growth rate for the pre-reform period at eight per cent. But the sharpest increase came after the reforms introduced in 2023.
Net FAAC rose to N10.09tn in 2023, representing a nine per cent increase. It then jumped by 34 per cent to N15.26tn in 2024 and expanded by another 30 per cent to a record N21.90tn in 2025.
This means the average annual growth rate accelerated from eight per cent in the pre-reform period to 24 per cent between 2023 and 2025. In effect, the pace of growth in distributable federation revenue was three times higher in the post-reform period than the average recorded before the reforms.
The figures also showed the extraordinary weight of the last three years in Nigeria’s federation revenue history. Of the N93.13tn shared between 2017 and 2025, the N47.25tn distributed between 2023 and 2025 alone exceeded the combined allocations recorded in several earlier years, meaning that every N2 shared over the nine-year period contained more than N1 distributed after the reforms.
Finance ministry speaks
The Federal Ministry of Finance, in its assessment of the reforms, said states and local governments had received substantially higher allocations, increasing the resources available to subnational governments for salaries, pensions, infrastructure and other public responsibilities.
The ministry said, “States and local governments received significantly higher allocations through the Federation Account, increasing the resources available to meet salaries, pensions, infrastructure and other responsibilities at the subnational level that benefit the people.”
It added that, compared with the monthly run-rate before the removal of petrol subsidy, “states received about N9.17tn in additional allocations from June 2023 to December 2025,” while local governments received about N6.66tn in additional allocations during the same period.
Further analysis of tier-by-tier annual distribution figures for 2022 to 2025 showed that the Federal Government received N1.996tn in 2022, N3.749tn in 2023, N4.570tn in 2024 and N7.024tn in 2025, bringing its four-year allocation to about N17.34tn.
The figures showed that the states emerged as the biggest beneficiaries of the post-reform expansion in FAAC receipts. Their annual allocation jumped from N4.18tn in 2023 to N8.93tn in 2025, more than doubling within two years. In 2024, states received N6.53tn, exceeding the Federal Government’s N4.57tn allocation in the figures contained in the document.
A World Bank analysis similarly identified 2024 as a turning point when state governments received more from FAAC distributable revenues than the Federal Government, reflecting a structural shift in the pattern of federation revenue distribution.
The expansion in FAAC receipts has been linked largely to the fiscal reforms introduced by President Bola Tinubu’s administration after it assumed office in May 2023.
The reforms included the removal of petrol subsidy and changes to the foreign exchange regime, alongside efforts to improve tax collection and revenue remittances.
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