Oyedele Calls on States to Boost IGR, End Allocation Reliance

Nigeria's Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has advocated for robust fiscal federalism, enhanced revenue generation, and economic diversification to bolster the nation's resilience against economic downturns. Oyedele delivered this message on Wednesday in Owerri, Imo State, during the ongoing 2026 National Council on Finance and Economic Development Retreat.

Addressing the retreat's theme, 'Strengthening Fiscal Federalism for Equity, Sustainable Development and Economic Resilience in a Volatile Global Economy,' the minister emphasized the need to re-examine existing allocation and derivation principles. He also called for increased fiscal responsibility, accountability, and cooperation among Nigeria's three tiers of government to foster sustained economic growth.

Oyedele stated, “Nigeria must move from an allocation-dependent economy to one driven by production, investment and job creation.” He highlighted that recent economic reforms, including the removal of fuel subsidy and the unification of the foreign exchange market, have significantly boosted revenues available for distribution through the Federation Account. Prior to 2023, monthly Federation Account allocations typically ranged between N300 billion and N600 billion, but now frequently surpass N2 trillion. For instance, in June 2026, the Federation Account Allocation Committee (FAAC) disbursed N2.8 trillion to the Federal, State, and Local Governments.

However, Oyedele cautioned that merely higher allocations would not guarantee development. He insisted that these increased revenues must translate into improved infrastructure, human capital development, productivity, and better public services. He strongly urged state governments across the country to strengthen their Internally-Generated Revenue (IGR) mechanisms, attract investments, and create jobs, rather than relying heavily on federal allocations.

The minister further advised governments to practice prudent borrowing and enhance transparency in public finance. He warned against accumulating liabilities without clear repayment strategies, encouraging participants to engage in “an evidence-led conversation, not a positional one,” to ensure that “fiscal federalism evolves in response to Nigeria’s changing economic realities.”

Imo State Governor, Hope Uzodimma, represented by his Deputy, Chinyere Ekomaru, echoed these sentiments, stressing the importance of empowering states to generate more revenue and manage resources efficiently. He noted that continued dependence on oil revenue is no longer sustainable. Governor Uzodimma expressed gratitude to the Federal Government for choosing Imo as the host, describing the retreat's theme as timely given current global economic pressures. He detailed his administration's efforts to achieve “shared prosperity” through its 3R agenda, including digitizing revenue collection, plugging leakages, and increasing IGR. He added that Imo State has invested in agriculture, the digital economy, tourism, power, education, small and medium-sized enterprises, and infrastructure to create jobs and expand economic opportunities for its youth. He urged participants to devise practical strategies for deepening fiscal autonomy, improving revenue generation, and promoting equity among federating units.

Earlier, Mr. Mohammed Sanusi, Permanent Secretary, Special Duties, Federal Ministry of Finance, emphasized in his welcome address that the retreat was crucial, coming at a time when Nigeria is implementing major economic reforms to achieve macroeconomic stability and sustainable development. Sanusi highlighted the retreat as a vital platform for policymakers and stakeholders to deliberate on national economic issues.

Other prominent figures present at the retreat included Dr. Mohammed Shehu, Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission; Dr. Shamsudeen Ogunjimi, the Accountant-General of the Federation; Mr. Akintunde Oyebode, Chairman of the Forum of State Commissioners for Finance of Nigeria; and Dr. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), among others.