Renowned legal practitioner and former Nigerian Bar Association (NBA) president, Olisa Agbakoba, has alleged that over ₦20 trillion may have been lost from Nigeria’s Federation Account through under-remittances, unauthorised deductions, and weak financial oversight.
Speaking through a detailed policy statement released on Wednesday, Agbakoba questioned the management of Nigeria’s public revenues and warned that the country’s worsening debt crisis was being fueled by massive leakages from funds meant to accrue to the Federation Account.
According to him, the Federation Account — established under Section 162 of the 1999 Constitution — is legally meant to receive all revenues collected by the federal government before they are shared among the federal, state, and local governments.
Agbakoba, however, claimed that the system has been riddled with opacity and constitutional loopholes for over two decades. Citing figures from the World Bank’s Nigeria Development Update, he stated that ₦14.94 trillion was deducted from federation revenues in 2025 before the funds reached the Federation Account, representing about 39 percent of total earnings.
The senior advocate also referenced ongoing investigations into the Nigerian National Petroleum Company Limited, alleging that the oil giant under-remitted huge sums over the years. He said NNPCL was expected to remit ₦1.1 trillion into the Federation Account in 2024 but reportedly paid only ₦600 billion, leaving a shortfall of ₦500 billion.
Agbakoba further pointed to an active Federation Account Allocation Committee investigation into allegations that the company failed to remit $42.37 billion between 2011 and 2017 – an amount he estimated at about ₦12.91 trillion at current exchange rates.
Describing the situation as a constitutional and governance crisis, he argued that Nigeria was borrowing heavily to fund services that should ordinarily be financed through properly remitted national revenues.
He noted that Nigeria’s total public debt stood at ₦159.27 trillion at the end of 2025, while debt servicing reportedly consumed 69 percent of federal revenue in 2024, far above the 30–40% benchmark recommended by international financial institutions.
According to him, the consequences of the revenue leakages are evident in rising fuel prices, increasing school fees, poor healthcare services, declining purchasing power, and persistent strikes in public universities. Agbakoba blamed the crisis partly on constitutional gaps surrounding the management of the Federation Account, noting that the law failed to clearly define accountability mechanisms, auditing procedures, remittance timelines, and penalties for violations.
He also criticised the Treasury Single Account (TSA) policy introduced in 2015, saying although it reduced some leakages, it was merely an administrative reform that failed to address the deeper constitutional issues affecting revenue remittances to the Federation Account.
The former NBA president revealed that his recently released policy paper, titled: ‘Where Is Our Money? Nigeria’s Federation Account Crisis and the Case for Reform’, proposed legal and institutional reforms aimed at strengthening transparency and accountability in public finance management.
He urged Nigerians to pay closer attention to how public revenues are collected, managed, and distributed, insisting that fixing the Federation Account system was critical to addressing the country’s economic challenges.
