ActionAid Nigeria has called for an urgent forensic audit of Nigeria’s revenue management system following revelations that over ₦34 trillion was deducted from federal earnings before distribution to the three tiers of government.
In a statement issued on Thursday, the organisation said the deductions—estimated to account for more than 40 per cent of federal revenue in recent years—highlight deep-rooted weaknesses in public financial management and pose significant risks to fiscal stability and development financing.
Citing findings by the World Bank, ActionAid noted that a substantial portion of government income is absorbed through pre-distribution charges, including cost-of-collection mechanisms and agency remittances, with limited transparency regarding their composition and utilisation.
“These findings reinforce long-standing concerns about Nigeria’s widening fiscal constraints and rising debt burden,” the group said, warning that persistent revenue leakages represent both a governance failure and a missed opportunity to strengthen fiscal sustainability.
The organisation observed that the scale of deductions has grown alongside government revenues, leaving federal, state, and local governments with diminished resources to fund critical public services. It warned that the trend is increasing reliance on borrowing, referencing projections by the International Monetary Fund that Nigeria’s debt-to-GDP ratio could rise to 33.1 per cent by 2027.
ActionAid also raised concerns over what it described as “opaque and fragmented” revenue channels, noting that large portions of national income pass through multiple layers before reaching the Federation Account. According to the group, the lack of public disclosure on the structure, justification, and end-use of these deductions undermines accountability and weakens fiscal oversight.
The Country Director of ActionAid Nigeria, Andrew Mamedu, said the implications are already evident in the lives of Nigerians.
“For citizens grappling with rising inflation and declining purchasing power, reduced public resources translate into fewer investments in essential services,” he said, adding that weakening fiscal capacity is exacerbating insecurity and social instability.
The organisation further criticised the opacity surrounding major public expenditures, including concerns over the Nigeria Revenue Service building project, where cost details and procurement processes have not been publicly disclosed.
ActionAid warned that without urgent reforms, Nigeria risks entrenching a system in which public resources are significantly depleted before delivering meaningful developmental impact.
To address the situation, the group urged the Federal Government to undertake a comprehensive and transparent review of all revenue deduction frameworks. It also called for the publication of detailed breakdowns of deductions, strengthened independent oversight of revenue-generating agencies, and reforms to eliminate systemic leakages.
Additionally, it tasked the National Assembly with intensifying oversight through public hearings and scrutiny of deduction structures, while urging state governments, civil society, and the media to sustain pressure for transparency.
“An independent forensic audit of all deduction mechanisms is critical to restoring public confidence,” the organisation said.
Mamedu emphasised that Nigeria’s development trajectory depends not only on revenue generation but on the effective management and deployment of public resources.
“This is not just a fiscal issue; it is a matter of justice,” he said. “Every naira that fails to reach essential services denies citizens access to healthcare, education, and dignity.”
