The Federal Government’s economic management came under fresh scrutiny yesterday after the African Democratic Congress (ADC) accused President Bola Ahmed Tinubu and APC governors of allegedly diverting over N800 billion from Federation Account Allocation Committee (FAAC) funds for 2027 politics, even as the administration defended new tax reforms and warned that Nigeria could no longer rely on borrowing to finance development.
The opposition party’s allegation, coming amid reports of renewed talks with the World Bank over a fresh $1.25 billion loan facility, has intensified concerns over public finance management, fiscal transparency and the growing hardship facing Nigerians under the government’s economic reforms.
While the ADC accused the ruling party of converting public resources into a political “war chest” ahead of the next general election, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, insisted that the country must urgently build a sustainable fiscal system capable of funding infrastructure, healthcare, education and social protection without excessive dependence on debt.
In a statement issued by its National Publicity Secretary, Bolaji Abdullahi, the ADC described the alleged diversion of FAAC allocations for political purposes as “shameless, cruel, and criminal”.
The party said reports alleging that over N800 billion was raised through deductions from FAAC allocations confirmed what Nigerians had long suspected about the APC administration.
“The report alleging that over N800 billion was raised through deductions from FAAC allocations for political purposes confirms what Nigerians have long suspected, that while the administration continues to tell the people to endure the pains of its ill-fated economic reforms, the APC has been converting public resources into a war chest for 2027 politics,” the party stated.
The ADC argued that despite record allocations to states following subsidy removal and naira devaluation policies, citizens had continued to experience worsening poverty and hardship.
“Under this APC government, states are receiving more money than at any other period in Nigeria’s history, yet Nigerians are poorer, hungrier, and more desperate than ever before,” it said.
“Roads are still collapsing. Hospitals are still empty. Schools are still underfunded. Workers are underpaid. Communities remain unsafe. The only thing growing is the political appetite of the ruling party.”
The opposition party maintained that if the allegations published by The Will were true, they would amount to political corruption and theft of resources meant for development and citizens’ welfare.
“FAAC allocations are meant for development, salaries, healthcare, education, infrastructure, security, and the welfare of citizens, not for financing the re-election plans of one man,” the statement added.
The ADC also called for an independent investigation into the alleged deductions and related accounts reportedly linked to the operation.
The allegations emerged as Oyedele yesterday warned that Nigeria could no longer continue financing development mainly through borrowing.
Speaking at the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja, the minister said government revenue had remained inadequate to meet the country’s growing development needs.
“Nigeria cannot continue to finance development primarily through borrowing. We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security, and social protection,” he said.
His remarks came less than 24 hours after reports surfaced that the Federal Government had intensified engagement with the World Bank over a fresh $1.25 billion loan targeted at supporting economic reforms, job creation and competitiveness.
Oyedele said the administration’s ongoing tax reforms were designed to strengthen fiscal sustainability, encourage investment and reduce distortions within the economy.
According to him, Nigeria’s tax system had suffered longstanding structural weaknesses, including multiple taxation, fragmented administration, weak compliance and overdependence on a narrow revenue base.
“Businesses faced overlapping debts, unpredictable enforcements, and rising compliance costs. Citizens often perceived the tax system as unfair because the burden was unevenly distributed,” he said.
The minister disclosed that minimum wage earners had been exempted from personal income tax under the reforms, while the burden on low- and middle-income earners had also been reduced.
He added that the government was proposing reductions in companies’ income tax rates to improve Nigeria’s attractiveness to investors and modernising the Value Added Tax system through expanded input VAT credits and exemptions for essential goods and services.
Oyedele further said the government was working with states to harmonise taxes and reduce multiple levies on businesses, disclosing that 15 states had already enacted tax harmonisation laws.
He, however, acknowledged lingering challenges, including weak institutional capacity, public distrust and difficulties integrating the informal sector into the tax net.
Also at the conference, Vice President Kashim Shettima and Senator Adams Aliyu Oshiomhole called for renewed patriotism in tax compliance, as stakeholders across government and the private sector stressed the importance of transparency and public trust in Nigeria’s ongoing fiscal reforms.
Delivering the keynote address on behalf of the Vice President, Special Adviser to President Bola Ahmed Tinubu on Economic Affairs, Tope Fasua, said the administration’s economic agenda was anchored on inclusive growth, innovation and efficient taxation.
According to Shettima, the government aims to move Nigeria beyond dependence on raw material exports towards a diversified, innovation-driven economy capable of empowering citizens across all social classes.
He said the reforms were designed to support productivity and enterprise among small-scale traders, rural farmers and businesses.
The Vice President also identified infrastructure development, particularly rail and urban transport systems, as critical to commerce and economic integration.
He added that the administration envisages a Nigeria where locally manufactured goods gain global recognition and where the country’s tax system becomes a model of efficiency and transparency in Africa.
Shettima, however, acknowledged challenges in public awareness of the reforms, noting that many Nigerians remained unaware of key provisions, including tax exemptions for individuals earning N1 million or less annually and small businesses with a turnover below N100 million.
“These reforms are deliberately pro-poor and pro-business,” he said, stressing the need for improved communication to counter misinformation and strengthen public confidence.
He described tax compliance as an act of patriotism and urged citizens to regard taxation as a contribution to national development rather than a burden.
In his remarks, Senator Oshiomhole described taxation as the foundation of governance, arguing that sustainable development depends on a functional and equitable tax system.
He said the government’s responsibility was to create an enabling environment for wealth creation, while taxation provides resources for infrastructure and social services.
The lawmaker advocated a more progressive tax structure, proposing higher tax rates for high-income earners and owners of luxury assets.
According to him, it is inequitable for affluent individuals to pay similar effective rates as average workers, adding that reforms should address such imbalances to improve fairness and boost revenue generation.
Oshiomhole also called for the revival of civic responsibility in tax payment, recalling that tax compliance was once viewed as a moral obligation before the oil boom era.
He urged political actors to clearly state their fiscal positions, maintaining that taxation should remain central to national political discourse.
Stakeholders at the conference also underscored the need for transparency, accountability and professionalism in implementing the reforms.
In a goodwill message, Chairman of the Presidential Committee on Tax Policy Implementation and incoming Minister of Power, Joseph Tegbe, described the reforms as the most ambitious restructuring of Nigeria’s tax system in a generation.
He said the changes covered progressive income taxation, revenue administration and subnational fiscal capacity.
Similarly, CITN President, Innocent Ohagwa, said the reforms reflected a collective commitment by government and stakeholders to build a more effective and sustainable fiscal framework.
He urged tax professionals to uphold ethical standards, encourage compliance and support the implementation process.
Participants at the conference also stressed the need to align Nigeria’s tax system with global standards, noting that the country’s shift away from oil dependency had made taxation a central pillar of national revenue strategy.
The conference, themed “Tax Reforms and Global Relevance: Nigeria’s Tax System for a Sustainable Future,” examined policy options and strategies for strengthening the country’s fiscal outlook.
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